Question

Why is accrual accounting better than cash?

Answer 1

The accrual basis of accounting is a better indicator of the business performance as it shows when the income and expenses have taken place. It provides better insight into the sales trends as compared to cash accounting which recognizes sales when the paymentlly received.

Also read:

• Difference Between Cash Basis and Accrual Basis of Accounting
• Accrual Basis of Accounting
• GAAP Generally Accepted Accounting Principles
• Difference Between GAAP and IFRS