This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Why do accrual basis financial statements provide more useful information than cash basis financial statements? The result of accrual accounting are income statement that better measures the profitability of a company during a specific time period; and a balance sheet that better shows the financial condition of the company. Describe when each method (cash basis and accrual basis accounting) would be appropriate to use. Revenues and costs are recognised as they are earned or incurred under the accrual basis of accounting. This aids the assessment of the entity's performance and financial position. The cash basis of accounting should only be used for cash flow information....
View Full Document
This note was uploaded on 10/17/2011 for the course ACC 225 acc 225 taught by Professor Unknown during the Spring '10 term at University of Phoenix.
- Spring '10