Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.

Question

Quizplus · Accepted Answer

This statement is false. Income can appear to be higher under the cash basis in certain situations, but the accrual basis provides a more accurate and comprehensive view of income over a longer period of time. Under the accrual basis, revenue is recognized when it is earned and expenses are recognized when they are incurred, regardless of when cash is received or paid.

Income Will Always Be Greater Under the Cash Basis of Accounting