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Advantagea and disadvantages of Accrual accounting

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

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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.

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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 provided by:
Edwin Sinclar, MBA
Education
  • MBA, Aspen University
  • Bachelor of Science , Berea College
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