What accounting method should hariette choose when she runs the profit and loss report?

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03-08-2022
Business

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What accounting method should hariette choose when she runs the profit and loss report?

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smecloudbird18 smecloudbird18 · Answer 1 · 2022-08-14T01:14:15-04:00

Hariette should choose cash basis of accounting when she runs the profit and loss report. A company's reporting guidelines and practices for revenues and expenses make up its accounting method. Cash accounting and accrual accounting are the two primary accounting techniques.

Revenues and costs are recorded in cash accounting when they are received and paid. There are three different accounting methods: modified cash basis, cash basis, and accrual basis. Let's briefly review the fundamentals before we discuss which types of firms use certain accounting techniques.

If you only consider popularity, accrual accounting comes out on top since it is both the most popular and the most accurate techniques.

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