How is the accrual method potentially more beneficial for businesses?

The accrual method is potentially more beneficial for businesses primarily because it aligns income and expenses with the period they are incurred. This accounting method recognizes revenues when earned and expenses when incurred, regardless of when cash transactions occur.

This alignment provides a clearer picture of a company's financial performance over specific periods, facilitating better financial analysis and decision-making. Businesses can assess their profitability and operational efficiency more accurately because the financial statements reflect the actual activities and obligations during a particular period. This insight is especially important for performance evaluation, forecasting, and strategic planning, as it allows stakeholders to understand the true financial health of the business without being skewed by the timing of cash transactions.

While improved cash flow management, simplification of record-keeping, and restricting to cash transactions may have their advantages, these do not capture the critical benefit of the accrual method as directly as the alignment of income and expenses does.