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    Accounting Question - Pure Accrual Accounting

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    In what industries might the rules of pure accrual accounting not make sense? Explain.

    © BrainMass Inc. brainmass.com June 3, 2020, 8:07 pm ad1c9bdddf
    https://brainmass.com/business/cash-vs-accrual-accounting/accounting-question-pure-accrual-accounting-124533

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    Financial statements can be prepared on the basis of either accrual or cash basis. As per cash-based accounting, a transaction is not recorded on the books until payment for that transaction has been received or paid out. In accrual-based accounting, on the other hand, revenue is recorded when it is earned and expenses are recorded when they're incurred, no matter when the cash is paid or received.

    While most small practices use cash-based accounting, most businesses and larger health ...

    Solution Summary

    The solution looks at what industries might the rules of pure accrual accounting not make sense.

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