The accrual basis of accounting:
A)Is generally accepted for external reporting since it is more useful for most business decisions.
B)Is flawed because it gives complete information about cash flows.
C)Recognizes revenues when received in cash.
D)Recognizes expenses when paid in cash.
E)Eliminates the need for adjusting entries at the end of each period.

Question

Quizplus · Accepted Answer

The accrual basis of accounting is generally accepted for external reporting because it provides a more accurate picture of a company's financial position by recognizing revenues when earned and expenses when incurred, regardless of when cash transactions occur.

The Accrual Basis of Accounting