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stepan [7]
3 years ago
12

The accrual basis of accounting:____________

Business
1 answer:
posledela3 years ago
6 0

Answer:

A. Is generally accepted for external reporting because it gives more useful information.

Explanation:

Accrual Basis of Accounting states that: Transactions should be recorded when they are entered into, irrespective of cash settlement done or not.

For Eg: 'Sales' would be recognised & recorded when goods are sold & debtor's obligation / liability to pay has been established, whether cash has been received or not.

This basis of accounting provides a clearer picture of enterprise' performance during an accounting period (i.e financial year), by providing for the real expenses & revenues of that period only.

Eg: Outstanding Expense (due but not paid) if ignored on cash basis - would lead to underestimation of expenses & overestimation of profit.

So, Accrual System is generally accepted because it is more 'Relevant' i.e more useful to Accounting information users.

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Universal Concerts wants to bring a series of country music concerts to Canada next year. In general, Western Canadians prefer c
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The correct answer is letter "A": geographic characteristics.

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