Which of the following are in accordance with IFRS? Cash basis accounting Both accrual basis and cash basis accounting Neither a

Question

Alexxx [7]

3 years ago

7

Which of the following are in accordance with IFRS? Cash basis accounting Both accrual basis and cash basis accounting Neither a

ccrual basis nor cash basis accounting Accrual basis accounting

Business

1 answer:

Anton [14] · Answer 1 · 2021-12-31T01:29:32+03:00

Answer:

Accrual basis accounting

Explanation:

Under Accrual basis of accounting, income is recognized when it is earned and not when actual cash is paid or received.

Under cash basis of accounting, income is only recognized when actual cash is received.

Accrual basis of accounting ensures transactions pertaining to a period are recorded in that period and it depicts more accurate financial picture unlike in cash accounting wherein income for a period might be overstated or understated.

Following cash basis of accounting is not in accord with both US GAAPs (generally accepted accounting principles) and IFRS.