According to generally accepted accounting principles, accounting for postretirement benefits other than pensions must adhere to the:

Question

Quizplus · Accepted Answer

Generally accepted accounting principles require that accounting for postretirement benefits other than pensions be done using the accrual basis of accounting, which recognizes expenses as they are earned and liabilities as they are incurred, rather than when payment is made. This ensures that financial statements accurately reflect the company's financial position and performance. The use of cash basis or modified cash basis accounting would not provide accurate reporting of these benefits. The modified accrual basis is used in governmental accounting, and is not applicable to postretirement benefits in the private sector. Therefore, the correct answer is A - accrual basis of accounting.

According to Generally Accepted Accounting Principles, Accounting for Postretirement Benefits