In the cash system of accounting, a transaction is recorded or posted:

• A. When cash changes hands
• B. When revenue is earned
• C. At the end of the period
• D. When an invoice is issued

Answer: (A)

In the cash system, you record transactions only when cash actually changes hands. This means revenue is recognized when cash is received and expenses are recognized when cash is paid. So a transaction is recorded at the moment cash moves, not when the work is performed, an invoice is issued, or at the end of a period.

The other ideas reflect accrual-based timing: revenue is recognized when earned (not just when paid), an invoice creates a receivable, and end-of-period adjustments are typical in accrual accounting.