Do hospitals use accrual accounting?

Yes, hospitals use accrual accounting. Most public and nonprofit companies follow the accounting rules (GAAP), and accrual accounting is the only accepted accounting system allowed by GAAP. Also, with cash accounting, errors can go unnoticed as unpaid accounts are not recorded until payment is received. These unknown errors can lead you to make inaccurate decisions since they are based on inaccurate information.

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