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.
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 ...
This solution explains the main advantages and disadvantages of cash-based accounting. Additional resources are provided for greater student expansion.
Cash Basis and Accrual Basis of Accounting
What is the difference between the cash basis of accounting and the accrual basis of accounting? Which one would you select for a company that has inventory and why? Does the size of the company make a difference? Explain how. What would be the advantages and disadvantages of using one basis of accounting over the other?View Full Posting Details