Which method of preparing income statements provides the most information about future cash ﬂows?
A) accrual basis
B) cash basis
C) historical basis
D) actual basis

Question

Quizplus · Accepted Answer

The accrual basis of accounting provides the most information about future cash flows because it records revenues when earned and expenses when incurred, regardless of when cash is received or paid. This method gives a more accurate picture of a company's financial health and future cash flows by including receivables and payables.

Which Method of Preparing Income Statements Provides the Most Information