Which of the following statements about cash versus accrual accounting is most correct?
1) In cash accounting, an event is recognized when a cash transaction occurs.
2) In accrual accounting, an event is recognized when a cash transaction occurs.
3) Most large healthcare organizations use cash accounting.
4) Most small healthcare organizations use accrual accounting because it closely matches statements required for income tax purposes.
5) In cash accounting, an event is recognized when the obligation for a cash transaction is created.