The cash basis of accounting is more useful than the accrual basis as the balance in the bank account is always reflected in the financial statements.

Question

Quizplus · Accepted Answer

The cash basis of accounting records revenues and expenses when cash is actually received or paid, not reflecting the company's true financial position as accurately as the accrual basis, which matches revenues with their corresponding expenses in the period they occur, regardless of when cash is exchanged.

The Cash Basis of Accounting Is More Useful Than the Accrual