e cash bas

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Q2. Would AT&T (T) and Microsoft (MSFT) use the cash basis or the accrual basis of accounting? Explain.

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The primary goal of an enterprise in selecting accounting policies must be that the financial statements created and presented on the basis of such accounting policies provide an accurate and fair assessment of the enterprise's state of affairs as of the balance sheet.

Cash basis focuses on the reception and payment aspects of the company.

Accrual foundation focuses on the operations aspect of the business and employs the matching idea to provide a genuine and fair representation of the accounts.

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