Select the correct response for each of the following multiple-choice questions:

1. The cash basis of accounting;

a. Recognizes revenues when sales are made or services are rendered.

b. Recognizes expenses as incurred.

c. Is typically used by some relatively small businesses and professional persons.

d. Recognizes revenues when cash is received and recognizes expenses when incurred.

2. The accrual basis of accounting:

a. Recognizes revenues only when cash is received.

b. Is used by almost all companies.

c. Recognizes expenses only when cash is paid out.

d. Recognizes revenues when sales are made or services are performed and recognizes expenses only when cash is paid out.