Answer:
Accrual basis accounting generally provides a better indication of an enterprise’s present and continuing ability to generate favorable cash flows
Explanation:
Accrual basis accounting is a better method than Cash basis accounting to visualize the performance of the company through the years. Cash basis accounting is generally used by small companies and does not provide a bigger picture. In Accrual basis accounting we see everything and match income and expenses when they occur instead in Cash basis accounting those are reported only when are paid.
In Accrual basis accounting income and expenses are reported when they are generated and not when they are paid. So ifor this method is more importan tthe moment we buy instead the moment we paid for it.
