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Which basis of accounting do most companies use, cash or accrual? Why? Which method is approved by GAAP? Why? What are the positives and negatives of each? Is it legal for an organization to keep two sets of accounting records; one for tax and one for book? Why or why not? What transactions might fall under a dual method?

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Solution Summary

The response is attached in 364 words plus a chart showing key differences between accrual and cash basis. Discussion is in everyday language suitable for novice.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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