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Advantages and Disadvantages of Cash-Based Accounting

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Consider the features of cash-based accounting and respond to the following:
Discuss some of the advantages or disadvantages of using the cash-basis method of accounting. Provide some examples.

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When we discuss cash based accounting and its advantages and disadvantages, we would contrast it with accrual based accounting. Accrual based accounting is the general standard for all public companies in the U.S. Some companies do adopt cash based accounting, which is less recognized under GAAP (generally accepted accounting principles).

The main advantage of cash based accounting is that it requires less. It requires less computer effort, less paperwork trails, and less in general in regards to time ...

Solution Summary

This solution explains the main advantages and disadvantages of cash-based accounting. Additional resources are provided for greater student expansion.