Following Disadvantage Using Cash Based Accounting System Question 5 Options May Misleadin Q32990398

Which of the following is a disadvantage of using a cash-basedaccounting system?

Question 5 options:

It may be misleading with respect to understanding a company’sactual cash position.

It can distort measure of the profitability of a business.

It needs greater bookkeeping requirements.

It is a more sophisticated approach to accounting.

It provides an accurate indication of the profitability of abusiness.

Question 6 (1 point)

Which of the following is a benefit of using an accrualaccounting system?

Question 6 options:

It accurately specifies a company’s current cash position.

It is only appropriate for cash-based businesses.

It greatly reduces the demand on bookkeeping.

It can be used to affect tax bills.

It provides a more accurate indication of the profitability of abusiness.