Question

1. The accrual method of accounting (a) is used by most companies because it offers a

better picture of long-term profitability, (b) does not report expenses that have been
incurred but not yet paid, (c) must be used by businesses with sales of more than $10
million a year, (d) is more difficult and tedious to use than the cash method.

Answer 1

Answer:The accrual method of accounting (a) is used by most companies because it offers a

better picture of long-term profitability.

Explanation:Accrual accounting is a financial accounting method that allows a company to record revenue before receiving payment for goods or services sold and record expenses as they are incurred.

In other words, the revenue earned and expenses incurred are entered into the company's journal regardless of when money exchanges hands. Accrual accounting is usually compared to cash basis of accounting, which records revenue when the goods and services are actually paid for.

Learn more about accrual accounting and how it differs from the other popular accounting method, cash accounting.