Modified Accrual Accounting Is Essentially the Same as Cash Basis

question 54

True/False

Modified accrual accounting is essentially the same as cash basis except that long term assets are not recorded.

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Definitions:

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically at the end of accounting periods, rather than after each sale or purchase.

Average Cost Method

An inventory costing method that assigns the average cost of all similar items in inventory to the cost of goods sold and to ending inventory.

Cost Of Goods Sold

Represents the direct costs attributable to the production of the goods sold in a company, including materials and labor.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.