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accrual accounting

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Can you help me with the two following accounting questions and spreadsheet? Having a hard time with examples.

Questions:
*How to define accrual accounting & how to contrast it with cash basis accounting?

*What 4 conditions must normally met for revenue to be recognized under accual basis accounting?

Spreadsheet:

Company had the following transactions in March:

A) sold merchandise to clients for $10,000. Received $6,000 in cash & rest on account. The cost of the merchandise was $7,000.

B)purchased $4,000 of new merchandise for inventory. paid $1,000 in cash and owed the rest on account.

C).Paid $600 for the month in payroll

D). Received a bill for $200 for power bill that will be paid in April

E) Recieved $1,000 from client as deposits on new orders of merchandise to be sold to the customers in April

Need help with the following statement with above info

*Cash Basis Income statement:

Revenues
Cash sales $
Client deposits $

Expenses
Merchandise purchases $
Payroll paid $

Cash Income $

Accural Basis Income Statement:

Revenues
Sales to clients $

Expenses
Cost of sales $
Payroll expense $
Power bill expense $

Net Income $

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Solution Summary

*How to define accrual accounting & how to contrast it with cash basis accounting?

*What 4 conditions must normally met for revenue to be recognized under accual basis accounting?

Solution Preview

1.
Accrual accounting records financial events based on economic activity rather than financial activity. Under accrual accounting, revenue is recorded when it is earned and realized, regardless of when actual payment is received.
Using ...

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