Accrual accounting does NOT require that the accounting records be updated prior to preparing financial statements.

Question

Quizplus · Accepted Answer

Accrual accounting requires that the accounting records be updated prior to preparing financial statements, as it involves recognizing revenues and expenses when they are earned or incurred, regardless of when the cash is received or paid. This means that adjustments need to be made for items such as accrued revenues, accrued expenses, prepaid expenses, and unearned revenues in order to reflect the true financial position of the company.

Accrual Accounting Does NOT Require That the Accounting Records Be