The primary difference between accrual-basis and cash-basis accounting is:

Multiple Choice

• Cash-basis accounting is allowed for financial reporting purposes but not accrual-basis accounting.
• Adjusting entries are only a necessary part of cash-basis accounting.
• Under accrual-basis accounting, an attempt is made to record economic events as they occur, regardless of when cash is received or paid.
• Accrual-basis accounting is not part of generally accepted accounting principles (GAAP).