What is meant by the term accrual basis of accounting? What is its alternative?
What is meant by the term accrual basis of accounting? What is its alternative?
Homework Answers
Question :
What is meant by the term accrual basis of accounting?
Answer:
Accrual basis of accounting is the method of recording revenues and expenses when they are earned or incurred respectively.
This is in terms with the Matching concept as this tries to make a match between the revenues and expenses. This basis also requires the use of various allowances and provisions .
Question:
What is its alternative?
Answer:
The alternative of accrual basis of accounting is the Cash basis of accounting.
This is a method of recording transactions involving income and expenses when the payments are received or made respectively.
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What is meant by the term accrual basis of accounting?
What is its alternative?
1. Match each term associated with accrual-basis and cash-basis accounting with its most appropriate description. Accru...
1. Match each term associated with accrual-basis and cash-basis accounting with its most appropriate description. Accrual-basis expense Accrual-basis revenue Revenue recognition principle Cause-and-effect Cash basis revenue Cash-basis expense Match each of the options above to the items below. A company pays cash for supplies in May and uses those supplies in June. The expense is recorded in May. A company pays cash for supplies in May and uses those supplies in June. The expense is recorded in June A company...
The Village of Rodale keeps its governmental fund accounting records on a modified accrual basis. At...
The Village of Rodale keeps its governmental fund accounting records on a modified accrual basis. At the end of the fiscal year the village accountant must covert the modified accrual information to accrual information to allow for preparation of the government-wide financial statements. Following are several transactions identified by the accountant that will require recognition and/or conversion for accrual accounting. The village has a fiscal year end of December 31. 1. On December 15 the village took out a long-term...
Explain the difference between accrual basis accounting and cash basis accounting. Accrual basis accounting reports revenues...
Explain the difference between accrual basis accounting and cash basis accounting. Accrual basis accounting reports revenues and expenses when cash is received or paid Cash basis accounting reports revenues and expenses in the period in which a service has been performed when cash is received or paid in the period in which a service has been performed
essay questions 1. Explain what is meant by “Accrual Accounting” and “Cash-based Accounting”, giving an example...
essay questions 1. Explain what is meant by “Accrual Accounting” and “Cash-based Accounting”, giving an example of a transaction and its handling under the two different accounting systems. (Chapter 3, Section 5.4.1 and in- class examples). 2. What is “Basic EPS” and how is it calculated? Is this number a good indicator for future company profitability? (Chapter 4, Section 6.2) 3. What is “Common-Size Analysis” of the Income Statement and why do we need it? (Chapter 4, Section 7.1)
Which of the following statements is true of accrual basis accounting?
Which of the following statements is true of accrual basis accounting? Accrual basis accounting records revenue only when cash is received. Accrual basis accounting always results in greater net income than cash basis accounting. Accrual basis accounting records expenses only when cash has been paid for them. Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
Explain the difference between accrual based accounting and cash basis accounting. -What is the revenue recognition...
Explain the difference between accrual based accounting and cash basis accounting. -What is the revenue recognition principle? -What is an accrual? -What is an unearned revenue? -What is the trial balance used for?
Describe accounting methods, cash basis and accrual basis.
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Compared to the accrual basis of accounting, the cash basis of accounting overstates income by the...
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Discuss the cash basis of accounting versus the accrual basis of accounting. Include * examples and...
Discuss the cash basis of accounting versus the accrual basis of accounting. Include * examples and references to any relevant principles. (3 marks)
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple...
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple Choice 1 O If payment is received at the same time a service is provided, it does not matter whether cash basis accounting or accrual basis accounting is used; both would record the transaction with the same journal entry The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which...
Explain the difference between accrual basis accounting and cash basis accounting. Accrual basis accounting reports revenues and expenses when cash is received or paid Cash basis accounting reports revenues and expenses in the period in which a service has been performed when cash is received or paid in the period in which a service has been performed
Discuss the cash basis of accounting versus the accrual basis of accounting. Include * examples and references to any relevant principles. (3 marks)
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple Choice 1 O If payment is received at the same time a service is provided, it does not matter whether cash basis accounting or accrual basis accounting is used; both would record the transaction with the same journal entry The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which...
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