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Required: The Week2 Forum consists of two separate questions. You will answer one of the two questions. The chosen question needs to be answered with an initial post ofat least 250 words. (1 st...

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Required:

The Week2 Forum consists of two separate questions. You will answer one of the two questions. The chosen question needs to be answered with an initial post ofat least 250 words.

(1st question) What are the differences between cash and accrual basis accounting? Provide an example of each type. Briefly explain why a company might need to adjust entries in the general ledger.

(2nd question) Evaluate how the appearance of solvency for a business changes when using cash vs. accrual accounting, noting which stakeholders might be affected and how.

Instructions:Your initial response should be no less than 250 words.

week-2-forum-instructions-acct105-nslapvob.docx
Answered Same Day Dec 09, 2021

Solution

Khushboo answered on Dec 11 2021
150 Votes
Cash Method V/s Accrual method of Accounting:
In accounting there exists two method of accounting such as cash method and accrual technique but both methods differ from each other in many ways. The main difference in both the methods is the timing of recognizing the income and expenditure of the entity. In the cash method of accounting, income and expenses are recorded immediately and on the other hand in accrual method of accounting lays emphasis on the projected revenue and expenses (Chizoba Morah 2019).
In other words in cash method revenue is recorded when cash is received and expenses are recorded when the cash has been paid....
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