What are the two bases of accounting recognized by IFRS?

The correct answer identifies the two primary bases of accounting recognized by IFRS: cash basis and accrual basis.

The cash basis of accounting records revenues and expenses when cash is actually received or paid. This method provides a straightforward approach and is often used by smaller businesses that do not maintain complex financial records. It reflects actual cash flows, which can be useful for managing liquidity.

On the other hand, the accrual basis of accounting, which is the primary basis prescribed by IFRS, recognizes revenues and expenses when they are incurred, regardless of when cash transactions occur. This approach provides a more accurate picture of a company's financial position and performance over time by matching expenses to the revenues they help generate. Accrual accounting is essential for ensuring that financial statements reflect the true economic conditions of the business, making it crucial for stakeholders needing valuable insights for decision-making.

Each of the other choices refers to concepts that are not recognized as standard bases of accounting under IFRS, which is why they are not suitable answers. The secondary bases or terms provided in those options lack the widespread acceptance and applicability as stipulated in IFRS standards.