Most businesses use:

Question

Quizplus · Accepted Answer

Accrual accounting is the most commonly used accounting method by businesses. It recognizes revenue and expenses when they are earned or incurred, regardless of when cash is received or paid out. This provides a more accurate picture of a business's financial health and helps with making more informed decisions. Cash accounting, on the other hand, only recognizes revenue and expenses when cash is received or paid out, which can lead to cash flow fluctuations and may not reflect the true financial position of a business. Cash and accrual accounting is also an option, but it requires more work to maintain both sets of books. Profit accounting is not a commonly used accounting method.

Most Businesses Use