Comparing accrual and cash-basis accounting [5 min]
The Johnny Flowers Law Firm uses a client database. Suppose Johnny Flowers paid $2,900 for a computer.
Requirements
1. Describe how the business should account for the $2,900 expenditure under
a. the cash basis.
b. the accrual basis.
2. State why the accrual basis is more realistic for this situation.
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