Cash-basis accounting is the preferred method of accounting according to the FASB.

Question

Quizplus · Accepted Answer

The FASB, or Financial Accounting Standards Board, actually requires companies to use accrual accounting rather than cash-basis accounting. Accrual accounting records transactions when they occur, regardless of when payment is received or made, while cash-basis accounting records transactions only when payment is received or made. Accrual accounting provides a more accurate picture of a company's financial position and performance.

Cash-Basis Accounting Is the Preferred Method of Accounting According to the FASB