BUSINESS FINANCE I Dersi Financial Statements and Analysis soru detayı:

CEVAP:

Accrual accounting is used to measure the full effects of an economic transaction which takes place within an accounting period regardless of the timing of cash outcomes. The use of accrual accounting creates complexities in corporate financial reporting. Since accrual accounting reports expectations of future cash outcomes of current economic transactions, it needs to rely on assumptions and estimations. Management is responsible of making assumptions and estimations that correspond to the economic realities of the business when preparing financial statements.