If a company uses accrual basis accounting, there are four cases where revenue and expense recognition may not coincide with cash transactions. Revenue is recognized before cash is received. Accrued Revenue b. Expense is recognized before cash is paid. Accrued Expense c. Revenue is recognized after cash is received. Revenue is recognized.
Cash is received.
May. Cash is paid at the end of the quarter. Interest payable is a liability account. Revenue is recognized after cash is received. Cash is received. Revenue is recognized at the end of May and June.