If an entity elects to focus on all economic resources, then it should adopt a modified accrual basis of accounting.

Question

Quizplus · Accepted Answer

Focusing on all economic resources typically aligns with the full accrual basis of accounting, which recognizes economic events regardless of when cash transactions occur, unlike the modified accrual basis which recognizes revenues when they are available and measurable and expenses when incurred.

If an Entity Elects to Focus on All Economic Resources