Question

Financial Statements prepared on a modified cash basis of accounting would contain items measured on which, if either, of the following bases______________.

Answer 1

Answer:

Cash Basis, Accrual Basis

Explanation:

Modified cash basis of accounting would contain items (accounts) measured under both the cash basis of accounting and the accrual basis of accounting.

The modified cash basis combines the usage of the two major bookkeeping practices: cash and accrual accounting. It gets the best of both worlds, recording sales and expenses for long-term assets on an accrual basis and those of short-term assets on a cash basis.