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Why is a need for accrual accounting

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Reference no: EM132823936

Problem 1: Why is there a need for accrual accounting?

A. Accrual accounting informs investors on the actual cash movements of a firm.

B. There is no need for accrual accounting as cash accounting satisfies investors' needs.

C. The full economic consequences of transactions in a period are not fully accounted for by cash accounting.

D. None of these choices.

Problem 2: Disclosure requirements are usually prescribed at which level by accounting regulations?

A. Maximum disclosure requirements.

B. Minimum disclosure requirements.

C. Voluntary disclosure requirements.

D. Both voluntary and minimum disclosure requirements.

Problem 3: Why might a firm not voluntarily disclose sensitive information regarding the operations of a business?

A. Because they are restricted from voluntarily disclosing this sort of information due to accounting regulations.

B. They may not want to damage their competitive position.

C. They believe they have already reached the maximum disclosure requirements allowed due to accounting regulations.

D. None of these choices.

Reference no: EM132823936

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