Which of the Following Statements About Cash Basis Accounting and Accrual

question 32

Multiple Choice

Which of the following statements about cash basis accounting and accrual basis accounting is correct?

• A) Net income is generally larger under accrual basis accounting than cash basis accounting.
• B) GAAP does not require the use of accrual basis accounting for external reporting.
• C) Accrual basis accounting and cash basis accounting will always produce the same amount of net income.
• D) Accrual basis accounting provides a better measure of operating performance than cash basis accounting.

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