Question

The accounting basis that helps to measure and report revenues and expenses in a way that clearly reflects the ability of a company to generate value for its owners is referred to as:

Answer 1

Answer:

Accrual basis of accounting

Explanation:

As we know that the income statement only reports the total expenses incurred and total revenues generated in a given period of time.

This accounting basis refers to the reporting of the transactions when they are earned or incurred instead of received or paid.

In this, it also follows the matching principle that stated the expenses should be matched with the revenues of the same period.