Commercial accounting and generally accepted accounting principles, generally prescribe the accrual basis of accounting
Individual
Exercise 2
Resource: Ch. 4 of Financial Accounting
Complete Exercise BE4-1.
Complete Problems 4-2A & 4-3A.
Answer the following:
· Commercial accounting and generally accepted accounting principles, generally prescribe the accrual basis of accounting over the cash basis.
· Describe both bases of accounting and explain the differences.
Submit as either a Microsoft® Excel® or Microsoft® Word document
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Describe both bases of accounting and explain the differences.
The two bases of accounting are accrual and cash basis. Accrual basis accounting is the method where income is recognized when earned with the expenses being recognized when incurred (McCarthy, Shelmon, & Mattie, 2012). Additional accounts are created to document the difference between the receipt of cash and recognition…………….