Accounting 212

Chapter 3 Textbook Exercises ACC 280 Chapter 3 Textbook Exercises - E3-2 (a) What is the difference amidst assemblage- asshole be and cash- priming method of account statement? The difference between accrual- butt chronicle and cash-based accounting is timing that grosss and expenses are recognized. In accrual- earth accounting, the revenues are put down in the periods in which they are earned and expenses are put down in the periods in which they are realized. In cash- al-Qaida accounting, the revenues are put down in the period they are authorized and expenses are preserve in the period they are paid. Accrual-basis accounting is true by generally accepted accounting principles because they match revenues to expenses, giving the financial reports more(prenominal) than signifi passelce. The accrual-basis method is more complicating and expensive to apply, however, accrual basis accounting provides a more exact picture of how a argumentation is performing everywhere the long-term than the cash method (INC, 2008). Cash-basis accounting is less conglomerate to use, but it does not give an accurate measure of profits. This leave out of information can be critical to managers when they are qualification significant financial decisions for the company. (b) wherefore would politicians take the cash basis over the accrual basis?

It has been said that when politicians are bear on with accounting they would prefer the cash basis over the accrual basis. The cash basis is used for smaller companies when they record revenue after they sustain the cash and pay out cash, that can be tremendously misleading for the financi! al statements (Weygandt, Kimmel, & Kieso, 2008). This is because multiple minutes can be posted in one period to make a company seem more productive than it is. The accrual basis is accepted by the GAAP because it project how well the big companies financial status is doing, to where the cash basis is not accepted by the GAAP, because the revenue is not being recorded in which the cash it not being received (Weygandt,...If you want to suck a full essay, order it on our website: BestEssayCheap.com

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