Rather than using the cash method accountants prefer to calculate profitability using the:
A) adjusted approach.
B) accrual approach.
C) permanent approach.
D) non-current approach.

Question

Quizplus · Accepted Answer

Accountants prefer to use the accrual method to calculate profitability because it reflects a more accurate representation of a company's financial performance by recognizing revenue when it is earned and expenses when they are incurred, regardless of when the cash is actually received or paid. This method provides a more complete picture of a company's financial situation and is considered more reliable than the cash method.

Rather Than Using the Cash Method Accountants Prefer to Calculate