Problem on accrual basis and cash basis accounting methods


Question: Noel is a recent graduate of the University of Oklahoma and is starting a new job as an auditor. He needs to understand both the accrual basis and cash basis accounting methods. Of the following statements, which one should Noel consider as correct? A) Cash basis accounting best represents the economic substance of the underlying activities. B) Accrual basis accounting and cash accounting are basically the same. C) Accrual basis accounting is generally required for public companies. D) Cash basis accounting is generally required for public companies. E) None of the answers are correct.

 

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Accounting Basics: Problem on accrual basis and cash basis accounting methods
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