Generally accepted accounting principles requires that companies use the ____ of accounting.
A) cash basis
B) deferral basis
C) accrual basis
D) account basis

Question

Quizplus · Accepted Answer

Generally accepted accounting principles require companies to use accrual basis accounting, which recognizes revenue when it is earned and expenses when they are incurred, regardless of when cash is exchanged. This provides a more accurate picture of a company's financial performance and allows for better decision-making. The cash basis only records transactions when cash is received or paid, while the deferral and account bases are not recognized accounting methods.

Generally Accepted Accounting Principles Requires That Companies Use the ____