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QuickBooks MCQs

When setting up Quickbooks for the first time, a grocery retailer would most likely opt for an Accrual based Accounting System over Cash because....?

It doesn't matter really and most choose accrual for tax purposes because the balance sheets would reflect the same picture at year end after adjustment entries are made.

Accrual based accounting recognizes revenue when it is earned not when cash is received giving management a better idea of profits and sales performance.. This helps identify expenses for high-volume retailers with large inventories and many vendors who o

They wouldn't. Cash Based Accounting is less efficient, but easier to adjust too and allows retailers leeway when it comes to inventory adjustment entries and expense recognitions. Plus it helps hide surges in sales and losses by spreading them out.

Answer

Correct Answer: Accrual based accounting recognizes revenue when it is earned not when cash is received giving management a better idea of profits and sales performance.. This helps identify expenses for high-volume retailers with large inventories and many vendors who o

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