Even Though GAAP Requires the Accrual Basis of Accounting, Some

question 29

True/False

Even though GAAP requires the accrual basis of accounting, some businesses prefer using the cash basis of accounting.

---

Definitions:

Asset Account

An account that represents a resource owned or controlled by a business, expected to provide future economic benefits.

Debit

An entry recorded on the left side of an account in double-entry bookkeeping that increases asset or expense accounts, or decreases liability, equity, or revenue accounts.

Liability Account

An accounting record of obligations or debts that a company owes to others, typically outside of the company.

Increase

An upward adjustment or growth in value, quantity, or size.