Question

"______ accounting uses adjusting entries to reflect economic reality even when there is _______ involved in the transaction. Thus, profits ______ equal to cash over a period. "

Answer 1

Answer:

accrual; no cash payment; do not

Explanation:

Indeed, accrual accounting uses adjusting entries to reflect economic reality, that is, it tells the actual financial position of the company such that even when there is no cash payment involved in the transaction.

Thus, profits may not necessarily equal cash over a period.