GB 518 RANK Let's Do This /gb518rank.com GB 518 RANK Let's Do This /gb518rank.com | Page 6

To adjust and update asset and liability
accounts
To close the revenue and expense
accounts
To determine the appropriate dividend
amount
In some situations to replace the income
statement
To replace the retained earnings account
in some businesses
Question 10. Question :
The accrual basis of accounting:
Is generally accepted for external
reporting since it is more useful for most business decisions
Is flawed because it gives complete
information about cash flows
Recognizes revenues when received in
cash
Recognizes expenses when paid in cash
Eliminates the need for adjusting entries
at the end of each period