Question

The term "financial statement" does not include a statement of cash receipts and disbursements, because this type of presentation violates the required use of accrual accounting under GAAP.
a. True
b. Fals

Answer 1

Answer:

False.

Explanation:

Financial statements are a representation of the financial position of a business entity at any given point in time.

The statements of cash receipts and disbursements meets the GAAP requirements of accrual accounting because this is the basis for which other financial statements are formed. For example if we receive a product from a vendor and issue an invoice to him. The invoice represents an unpaid accrual (account payable) and will go into other financial statements as a liability against the business.

So the statement above is false.