Accountants prefer to calculate profitability using the________ basis rather than the____________ basis:
A) adjusted; unadjusted.
B) permanent ; temporary.
C) accrual; cash.
D) current; non-current.

Question

Quizplus · Accepted Answer

Accrual basis takes into account all revenues earned and expenses incurred during a period, regardless of when the money changes hands. Cash basis only considers the actual inflow and outflow of cash during a period. Accrual basis provides a more accurate picture of a company's financial performance over time, which is why accountants prefer to calculate profitability using this basis.

Accountants Prefer to Calculate Profitability Using The________ Basis Rather Than