a. Identify at least two reasons why an accrual accounting income statement is more useful for analyzing

Question:

a. Identify at least two reasons why an accrual accounting income statement is more useful for analyzing business performance than a cash flow based income statement.
b. Describe what would be reported on the asset side of a cash flow based versus the asset side of an accrual accounting A strength of accrual accounting is its relevance for decision making. The strength of cash flow information is its reliability. Explain what makes accrual accounting more relevant and cash flows more reliable.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...