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Cash basis net income and Accrual basis net income will equal in the long run. Question...

Cash basis net income and Accrual basis net income will equal in the long run.

Question 1 options:

True
False
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Answer #1

Cash basis net income and Accrual basis net income will equal in the long run.

Yes, the statement is True. Cash basis net income and Accrual basis net income will equal in the long run because the main difference between cash and Accrula basis of accounting is the timing when the expenses and income of the business is recognised. Due to this the net income may differ in the short run for Cash and Accrual basis of Accounting, but in long run the net income will be same.

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