Question

Why do most large corporations use accrual accounting?

to appear more professional


It better represents the overall company finances.


It provides more detail about cash flow.


It requires less time than cash-based accounting.

I guess C.

Answer 1

Accrual accounting involves stating revenues and expenses as they occur, not necessarily when cash is received or paid out. In contrast, cash accounting systems do not report any income or expenses until the cash actually changes hands. ... Accrual accounting is based on the idea of matching revenues with expenses.

Answer 2

It better represents the overall company finances.

Step-by-step explanation:

Accrual accounting is a method of accounting in which revenues and expenses are recorded when they happen, as opposed to when money changes hands. This is the most common type of accounting. Accrual accounting better represents the overall company finances. However, it does not provide much information about cash flow, which can prove to be problematic without appropriate monitoring.