Accrual-basis accounting:
A) is not consistent with the GAAP conceptual frame work.
B) has been eliminated as a result of the IASB/FASB joint project on revenue recognition.
C) results in companies recording transactions that change a company's financial statements.
D) is optional under GAAP.

Question

Accrual-basis accounting: 
A) is not consistent with the GAAP conceptual frame work.
B) has been eliminated as a result of the IASB/FASB joint project on revenue recognition.
C) results in companies recording transactions that change a company's financial statements.
D) is optional under GAAP.

Quizplus · Accepted Answer

Accrual-basis accounting is consistent with GAAP and required for most companies. It results in companies recording transactions that change a company's financial statements by recognizing revenue and expenses when they are earned/incurred, rather than when cash is received/paid. The IASB/FASB joint project on revenue recognition did not eliminate accrual-basis accounting.

Accrual-Basis Accounting