Question

9. According to the Companies Act, 2013, all the companies are required to maintain their accounts according to
a) Cash Basis
c) Accrual Basis
b) Either (a) or (b)
d) Neither (a) nor (b)

Answer 1

Answer:

As described above, the company must keep its books of account in on accrual basis and based on the double entry system of accounting. Accrual Basis: It's an accounting assumption/concept which is followed during the preparation of the financial statements.

Answer 2

Question - According to the Companies Act, 2013, all the companies are required to maintain their accounts according to

a) Cash Basis

b) Accrual Basis

c) Either (a) or (b)

d) Neither (a) nor (b)

Answer - b) Accrual Basis is the correct answer.

1. As per Companies Act, 2013, Section 128, the books of account should be kept on following basis of accounting - accrual basis and double entry system.
2. Accrual basis of accounting refers to the method where data of revenue or expenses is entered when transaction occurs rather than when payment is received or made.
3. Double entry system is the method of entry where each entry in account is accompanied with opposite entry in different account.