Which of the following statements regarding accrual and cash basis accounting are TRUE?
Select ALL true statements.
Accrual basis accounting is required under FASB rules for ALL companies.
Accrual accounting generally leads to a higher reported net income than cash basis accounting.
If a company with a beginning accounts receivable balance of zero sells inventory on account and fails to collect all that it sells in a given year, accrual basis net income will be higher than cash basis net income.
When comparing accrual basis accounting and cash basis accounting, only revenue is different meaning expenses are always the same under both methods.
The statement of cash flows reports net income on a cash basis as the total of the Operating Activities section.
The IRS requires that corporate income tax returns be reported on the modified cash basis of accounting.