Question

Which of the following is a disadvantage of accrual basis accounting?
A.
It tracks money going out, but not money coming in.
B.
There aren't any good software programs for accrual basis accounting.
C.
It is difficult to see how much money the company owes.
D.
It is difficult to see a company's cash flow.


Please select the best answer from the choices provided

A
B
C
D

Answer 1

D

Accrual accounting records revenues and expenses when earned/incurred, not when cash is received or paid, so it can make a company's actual cash flow (cash on hand) harder to see.