"Thus, the ability to reason critically is essential to the acquisition of knowledge in any discipline and may, therefore, be appropriately regarded as a fundamental skill, on that new accountants should acquire as soon as possible. Critical thinking includes:"

1. Formulating and identifying deductively and inductively warranted conclusions from available evidence.

2. Recognizing the structure of arguments (premises, conclusions, and implicit assumptions).

3. Assessing the consistency, inconsistency, logical implications, and equivalence among statements.

4. Recognizing explanatory relations among statements.

Use above 4 items included in critical thinking.Use these 4 items, material covered in this objective ofWeirchCh 2, and your knowledge of the accounting term to answer the following (Be thorough and CORRECT with your answer.)Use complete sentences, your own words, proper grammar and correct spelling.

Critically analyze why GAAP requires the use of accrual accounting.