The Accrual Basis of Accounting

question 138

Multiple Choice

The accrual basis of accounting:

• A) Is generally accepted for external reporting because it is more useful than cash basis 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.