Explore BrainMass

Explore BrainMass

    Advantagea and disadvantages of Accrual accounting

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    What are advantages of public firms reporting to investors using an accrual and not a cash approach? What are the disadvantages?

    © BrainMass Inc. brainmass.com June 4, 2020, 1:24 am ad1c9bdddf
    https://brainmass.com/business/cash-vs-accrual-accounting/advantagea-disadvantages-accrual-accounting-398169

    Solution Preview

    What are advantages of public firms reporting to investors using an accrual and not a cash approach? What are the disadvantages?

    Advantages:

    1. The method complies with both tax law and accounting standard requirements
    ( It is the only method recognized by Generally Accepted Accounting Principles- GAAP)
    2. It gives an accurate representation of the financial position and performance of the ...

    Solution Summary

    This solution looks at the advantages of public firms reporting to investors using an accrual and not a cash approach. It also highlights the disadvantages of accrual accounting.

    $2.19

    ADVERTISEMENT