Question

Which of the following is not a comprehensive basis of accounting other than generally accepted accounting principles?A. Basis of accounting used by an entity to comply with the financial reporting requirements of a government regulatory agencyB. Cash receipts and disbursements basis of accountingC. Basis of accounting used by an entity to file its income tax returnD. Basis of accounting used by an entity to comply with the financial reporting requirements of a lending institution

Answer 1

Answer:

The correct answer is letter "D": Basis of accounting used by an entity to comply with the financial reporting requirements of a lending institution.

Explanation:

According to the Generally Accepted Accounting Principles (GAAP) income tax accounting, cash basis accounting, modified cash basis of accounting, and basis of accounting to comply with a mandatory governmental authority are valid to prepare financial statements. Any other method is forbidden.