The basic defect of cash-basis accounting is that the cash basis ignores important information.

Name: The basic defect of cash-basis accounting is that the cash basis ignores important information.
Brand: Quizplus
Rating: 4.8 (53 reviews)

Question

Quizplus · Accepted Answer

Cash-basis accounting only takes into account the cash transactions that have occurred, ignoring other important information such as accounts receivable, accounts payable, and accrued expenses/revenues. This can result in a distorted view of a company's financial health and performance.

The Basic Defect of Cash-Basis Accounting Is That the Cash