Asked by Preston Tribble on Jun 16, 2024
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The cash basis of accounting commonly increases the comparability of financial statements from period to period.
Cash Basis
An accounting method where revenues and expenses are recorded when cash is received or paid, not when the obligation is incurred.
Comparability
An accounting principle that ensures financial statements can be compared between periods and across companies.
Financial Statements
Consolidated reports that summarize the financial performance, position, and cash flows of a business over a specified period.
- Learn to distinguish between the methodologies of accrual and cash basis accounting.
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Learning Objectives
- Learn to distinguish between the methodologies of accrual and cash basis accounting.
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