Accounting Adjustments

Accounting Adjustments
  • From the e-Activity, explain the major advantages and disadvantages inherent in using both the cash and the accrual basis of accounting, and determine the one (1) that you believe provides the most useful financial information to users. Identify at least two (2) types of businesses that would benefit by preparing financial statements using either the cash or accrual basis of accounting. Justify your response.
  • Define the generally acceptable accounting principles that justify making adjusting entries, and speculate on the primary impact to investors and creditors if companies did not make adjusting entries until the end of the calendar or fiscal year.




…………….Answer Preview……………

Accrual accounting has some advantages and disadvantages. It is more popular than cash basis accounting since it is more accurate and has more faithful financial statement. This is because it records both revenues and expenses same time. It also produces an accurate gauge of entities performance of any given period of time (Tracy, 2013). On the other hand, accrual basis accounting has some disadvantages. It requires…


316 words


Yourhomeworksolutions is a one-stop-shop for all your homework needs. You can purchase already completed solutions to be used as samples and you can order assignments to be done afresh by our competent writers.