**Paragraph 1: Introduction to Accounting and Bookkeeping:** Accounting and bookkeeping serve as the cornerstone of financial management for businesses, providing a systematic and organized approach to tracking financial transactions. Accounting is the broader field that encompasses various processes related to financial information management, including recording, classifying, summarizing, and interpreting data. Within the realm of accounting, bookkeeping plays a pivotal role. Bookkeeping involves the detailed and day-to-day recording of financial transactions, ensuring accuracy and completeness in documenting a company's financial activities. This meticulous record-keeping is essential for informed decision-making, regulatory compliance, and the overall financial health of an organization.

**Paragraph 2: Principles and Practices in Accounting:** The principles governing accounting and bookkeeping are rooted in accuracy, consistency, and transparency. Under the accrual basis of accounting, revenue and expenses are recognized when they are earned or incurred, regardless of when the cash is received or paid. This principle ensures a more accurate representation of a company's financial position and performance. Double-entry bookkeeping, another fundamental concept, requires that every transaction has equal and opposite effects on at least two accounts, maintaining the accounting equation's balance. This system aids in error detection and provides a comprehensive overview of a company's financial landscape.

**Paragraph 3: Importance and Impact:** The significance of accounting and bookkeeping extends beyond mere record-keeping. These practices empower businesses to generate financial statements, such as the income statement, balance sheet, and cash flow statement. Financial statements offer stakeholders, including investors, creditors, and management, insights into the company's profitability, financial stability, and liquidity. Timely and accurate financial reporting is essential for strategic decision-making, tax compliance, and building trust with external parties. In essence, accounting and bookkeeping are indispensable tools that enable organizations to navigate the complexities of financial management in a systematic and transparent manner.

**Question:** Under the accrual basis of accounting, when is revenue recognized? a) When cash is received b) When the product is delivered or service is performed c) When the invoice is sent d) At the end of the fiscal year