What factors give rise to the superiority of accrual accounting over cash accounting? Explain.
Answer to relevant QuestionsAccrual accounting information is conceptually more relevant than cash flows. Describe empirical findings that support this superiority of accrual accounting.Determining core income is an important first step to estimating permanent income. Explain. What adjustments to net income should be made for estimating core income?What are the major issues that an analyst needs to consider when analyzing financial statements prepared under the fair value accounting model?What are discretionary expenses? What is the importance of discretionary expenses for analysis of earnings quality?Describe tasks that financial intermediaries perform on behalf of financial statement users.
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