Which of the following is a CORRECT statement about the different accounting methods?

Question

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GAAP requires companies to use accrual-basis accounting, which means that revenues are recorded when earned and expenses when incurred. Cash-basis accounting only records revenues when cash is received and expenses when cash is paid, which does not always accurately reflect the company's financial position or performance. Large companies in the United States are more likely to use accrual-basis accounting to provide more accurate financial statements for investors and stakeholders.

Which of the Following Is a CORRECT Statement About the Different