Which of the following is true about accrual-basis accounting?

Question

Quizplus · Accepted Answer

Accrual-basis accounting provides a better measure of performance because it recognizes revenue when earned and expenses when incurred, even if cash has not yet been received or paid out. This provides a more accurate reflection of a company's financial performance during a given period. The other options are not true - income can sometimes be larger or smaller with accrual-basis accounting, accrual-basis accounting is required by GAAP for most businesses, and accrual-basis accounting and cash-basis accounting can produce different results.

Which of the Following Is True About Accrual-Basis Accounting