Generally accepted accounting principles require accrual-basis accounting.

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Generally accepted accounting principles (GAAP) require companies to use accrual accounting to record transactions and financial activities. This means that revenue is recorded when earned, regardless of when payment is received, and expenses are recorded when incurred, regardless of when payment is made. This is in contrast to cash-basis accounting, where revenue is recorded when received and expenses are recorded when paid. Accrual accounting provides a more accurate picture of a company's financial position and performance, and is the preferred method under GAAP.

Generally Accepted Accounting Principles Require Accrual-Basis Accounting