Description
Create a diagram comparing accrual and cash accounting. Also, include a 350- to 700-word summary of the differentiation and uses of the two.
Cite 3 peer-reviewed, scholarly, or similar references to support your summary.
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Explanation & Answer
Hello Pal, I have finished with a few hours to spare for any revisions that you might suggest. For this assignment, I also included the Turnitin Report.
BOOKKEEPING APPROACHES
1
Bookkeeping approaches
Name
Institution affiliated
BOOKKEEPING APPROACHES
2
Bookkeeping approaches
Bookkeeping is an essential part of business firms. It facilitates the determination of a
company's worth, including computing revenues and profits. There are two basic approaches
used in accounting: the accrual and cash methods. The fundamental difference between these two
approaches lies in the timing of receipts and payments. The table below summarizes the
differences between the two models.
Accrual accounting
Cash accounting
Reports receivables as assets when the firm
Only reports receivables as assets when the
earns them
firm actually cashes them
Reports account payables as liabilities when
Only reports payables as liabilities when the
the firm incurs them
firm makes a payment
Reports all revenues at the time of earning
Only records revenues when the firm makes
actual cash receipts
Reports expenses at the point they match
Only reports expenses when the firm makes
revenues or when the firm consumes them
an actual payment
Net income is the difference between
Net income is the difference between cash
revenues and expen...
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