Which of the following is/are true under accrual accounting?
I. Expenses are recognized as services are used.
II. Revenues are recognized when service is performed.
III. Revenues are recognized in proportion to expenditures incurred.
IV. Revenues are matched with the associated costs.
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A. B. C. D.C
Accrual accounting follows the Matching Principle, which requires that revenues and gains be recognized when earned and expenses and losses be recognized when incurred. Under this, (I), (II) and (IV) are correct. However, (III) is not necessarily true.