Asked by Natasha Rodriguez on May 04, 2024
Verified
The cash basis of accounting is not in accordance with generally accepted accounting principles.
Cash Basis
An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.
Generally Accepted Accounting Principles
A set of accounting standards, principles, and procedures that companies use to compile their financial statements.
- Acquire knowledge of the essential elements of accrual accounting, especially focusing on the contrast between accrual and cash basis accounting.
Verified Answer
MS
Melania StefaniMay 11, 2024
Final Answer :
True
Explanation :
The cash basis of accounting does not adhere to the basic principles of GAAP (Generally Accepted Accounting Principles). It only considers the cash inflows and outflows during a particular period. Hence, it is not considered a reliable method of accounting.
Learning Objectives
- Acquire knowledge of the essential elements of accrual accounting, especially focusing on the contrast between accrual and cash basis accounting.