Accrual accounting decouples measured earnings from operating cash inflows and outflows.

Name: Accrual accounting decouples measured earnings from operating cash inflows and outflows.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Accrual accounting recognizes income and expenses when they are earned or incurred, regardless of when cash is actually received or paid. This means that earnings may not necessarily align with cash transactions, resulting in a decoupling of earnings from operating cash flows.

Accrual Accounting Decouples Measured Earnings from Operating Cash Inflows and Outflows