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Questions and Answers
What is the primary reason for the shift from cash basis to accrual basis accounting in the public sector?
What is the primary reason for the shift from cash basis to accrual basis accounting in the public sector?
- To achieve administrative efficiency (correct)
- To increase tax revenue
- To simplify the accounting process
- To reduce government spending
What is one of the challenges associated with the transition to accrual accounting?
What is one of the challenges associated with the transition to accrual accounting?
- It simplifies decision-making for government officials
- It leads to immediate and noticeable results
- It reduces the need for performance evaluation
- It requires a lot of time and effort (correct)
What do supporters of the accounting transformation believe accrual basis provides?
What do supporters of the accounting transformation believe accrual basis provides?
- More appropriate information for decision makers (correct)
- Reduced transparency in reporting
- Inflated financial figures
- Less accurate financial data
What is the accrual accounting transformation seen as by governments?
What is the accrual accounting transformation seen as by governments?
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What is one indication of the complexity of the transition to accrual accounting?
What is one indication of the complexity of the transition to accrual accounting?
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