Concept:Cash basis records income and expenses only when cash is actually received or paid.
Explanation:Under cash basis, no adjustments are made for outstanding or prepaid items.
So debtors, creditors, accruals and prepayments are ignored under this method.
When fixed assets are bought, the full payment is treated as an expense in the year of purchase.
This is why fixed assets are written off immediately under the cash basis.
The other options describe the accrual basis of accounting, not the cash basis.
Answer:C. Fixed assets are written off in the year of purchase.