Why Is the Cash Basis of Accounting Not Appropriate for Use

Multiple Choice

Why is the cash basis of accounting not appropriate for use by publicly traded corporations?

A) the OSC (Ontario Securities Commission) does not allow its use
B) no assets or liabilities other than cash would ever appear on the statement of financial position,giving a distorted picture of financial position
C) the profit reported could not be distorted if a large customer paid for goods in advance or we postponed paying for goods or services until the next accounting period
D) the cash basis is not permitted for tax purposes