What are the items in cash-basis financial statements that make cash-basis accounting inconsistent with the theory underlying the elements of financial statements?
Cash Based Accounting:
The cash basis accounting promotes the recording of business transactions based cash and not on account. Revenue, Expense, Assets, Liabilities and equity are recorded in terms of cash only under their respective heads.
Answer and Explanation: 1
If a company adapts cash basis accounting policy it do not records any of invoices, payment or expenses which outstanding.
Therefore it does not...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 3 / Lesson 7
Learn about recording transactions. Understand what recording transactions is, examine the process of recording transactions, and identify its importance.