What is the primary objective of accrual accounting?

Question

Quizplus · Accepted Answer

The primary objective of accrual accounting is to measure the economic performance of an entity, rather than just measuring the cash flow. Accrual accounting records revenues when earned and expenses when incurred, regardless of when the cash is actually received or paid. This provides a more accurate picture of a company's financial health and performance over time. While predicting future cash flows and economic performance may be a byproduct of accrual accounting, they are not the primary objective.

What Is the Primary Objective of Accrual Accounting