The accrual basis of accounting is more complex than the cash basis of accounting as it involves such decisions as determining when to record revenues and expenses.

Question

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The accrual basis of accounting is more complex because it requires companies to record revenues when they are earned and expenses when they are incurred, regardless of when cash is received or paid. This involves making judgments about the timing of revenue and expense recognition, which adds complexity compared to the cash basis of accounting, where transactions are recorded only when cash changes hands.

The Accrual Basis of Accounting Is More Complex Than the Cash