A fellow student makes the following statement: You can easily tell whether a company is using the

Question:

A fellow student makes the following statement: "You can easily tell whether a company is using the cash or accrual basis of accounting. When an amount is paid for future rent or insurance services, a firm that is using the cash basis debits an expense account while a firm that is using the accrual basis debits an asset account." Is the student correct?

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