Final answer:
To avoid the need for frequent adjustments on a balance sheet, the cash basis of accounting is the best suited because it reports transactions only when cash is received or paid. It is simpler than other methods but may not always provide an accurate financial picture for larger companies.
Step-by-step explanation:
To answer the question: Which of the following balance sheet reporting methods is best suited to avoid adjustments? the correct answer is a) Cash basis. The cash basis of accounting records transactions when cash changes hands. This method does not require adjustments for accounts receivable, accounts payable, or other accruals, as is the case with the accrual basis of accounting. The modified cash basis is a hybrid between accrual and cash basis, and the tax basis is aligned with tax regulations and may require adjustments to comply with the Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).
The cash basis does not involve recording of revenues until the cash is received, or expenses until the cash is paid. Consequently, it often requires less frequent adjustments. This method is typically favored by small businesses and individuals for its simplicity. However, it does not always provide the most accurate picture of a company's financial situation, which is why larger companies often opt for the accrual method.