Question

P3-2 (book/static) For the factors listed below, indicate whether they significantly contribute to the use of accrual accounting for financial reports (rather than using the cash basis). Significant contributor Yes or No Yes b. Factor a. Establishment of accounting standard setters such as the International Accounting Standards Board Invention of the double-entry system of bookkeeping Creation of indefinite-life entities like corporations d. Development of credit cards and other substitutes for cash Preparation of periodic financial reports No C. Yes No e. Yes

Answer 1

a	Yes	Accounting standards help in preparation of accounts
b	Yes	Double entry book keeping is the genesis of accrual accounting
c	No	Investors cannot wait for a lifetime for the company to dissolve to understand if it has made money
d	No
e	Yes