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Fred, a financial accountant at a multinational company, is asked by his supervisor to find out the exact income the
company earns from the sale of its products over the next five weeks. To do this, for the next five weeks, Fred matches the
revenue earned from the sale of the company's products and matches the expenses incurred by the company to the
revenue they help produce. In this scenario, which of the following has Fred used to get the required information?

Respuesta :

Answer: accrual basis accounting

Explanation:

Following the information given in the question, Fred used the accrual basis accounting. The accrual basis accounting refers to the accounting method such that the expenses and the revenue are recorded when the transaction takes place rather than waiting for the time that payment is being made.

This helps follow the matching principle, that states that the revenues and the expenses incurred have to be recognized in thesame period.

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