Under the cash basis of accounting, no adjustments are necessary prior to the preparation of the financial statements.

Question

Quizplus · Accepted Answer

Under the cash basis of accounting, transactions are recorded when cash is received or paid, regardless of when the transaction occurred. Therefore, no adjustments are necessary prior to the preparation of the financial statements to reflect accruals or deferrals.

Under the Cash Basis of Accounting, No Adjustments Are Necessary