Paying $40 For Discussions, $15 For 1, And $25 For 2 Due In

Paying 40 For Discussions 15 For 1 And 25 For 2 Due In 24 Hrsdiscussi

Paying 40 For Discussions 15 For 1 And 25 For 2 Due In 24 Hrsdiscussi

Paying 40 for discussions 15 for 1 and 25 for 2 due in 24 hrs. Discussion 1 Accrual Accounting Write a four paragraph answer, citing the text, to – What difference does cash or accrual basis of accounting make to recording two tasks or functions of your current (or previous) job? Cite a specific example, including sample figures, of a case where cash vs. accrual accounting would make a significant difference. Guided Response: Respond to at least two of your fellow students' postings. Discussion 2 Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates.

Your grade will reflect both the quality of your initial post and the depth of your responses. Refer to the Discussion Forum Grading Rubric under the Settings icon above for guidance on how your discussion will be evaluated. Season One Post your income and balance sheet that are going to be used in your accounting report. Point out two items in your report that you think are most interesting. Guided Response: Respond to at least two of your fellow students' postings.

Paper For Above instruction

The distinction between cash and accrual accounting fundamentally influences how businesses record and report their financial activities. This difference directly impacts the recognition of revenue and expenses, thereby shaping the financial statements and the interpretation of a company's financial health. An exploration of these two accounting methods reveals how they affect daily operations and strategic decisions within an organization, exemplified through specific practical scenarios.

In cash accounting, revenues and expenses are recognized only when cash is received or paid. This approach offers simplicity and immediate insight into cash flow, making it particularly advantageous for small businesses with straightforward transactions and limited credit. For instance, consider a freelance design company that invoices clients monthly. If the company receives a payment of $5,000 in March but performs the work in February, the cash basis records the revenue in March, the month the cash is received. Conversely, under accrual accounting, the revenue is recognized in February when the service was provided, regardless of when the cash is actually received. This timing difference can significantly affect financial statements; accrual accounting provides a more accurate picture of income reflecting the actual performance period, whereas cash accounting may distort income and expenses if receivables or payables are not aligned with cash flow.

A concrete example illustrating the impact of these accounting methods involves a manufacturing firm that supplies parts to a retailer. Suppose the firm makes a sale of $10,000 on credit, with the invoice issued in December, but the payment is received in January. Under cash accounting, the sale would be recorded in January, when the cash is received, while accrual accounting would record the revenue in December, when the delivery and sale occurred. The choice of method influences key financial ratios such as profitability and liquidity ratios. For example, if the business's cash flow is tight, recognizing revenue only upon receipt (cash basis) could delay the recognition of income, thereby understating profits in December and overstating them in January, potentially impacting decision-making and financial analysis.

Furthermore, the selection between cash and accrual accounting can influence managerial decisions regarding budgeting, forecasting, and tax planning. Business owners must consider that accrual accounting aligns more closely with matching revenues with related expenses, thus providing a clearer picture of operational efficiency. However, it also involves more complex bookkeeping and compliance requirements. For example, a retail chain that recognizes sales when items are shipped (accrual) will have different tax obligations compared to one that recognizes sales only when cash is collected. Understanding these distinctions ensures accurate financial reporting and informed strategic planning, underscoring the importance of selecting the appropriate accounting method based on business needs.

In conclusion, the choice between cash and accrual accounting significantly affects the recording of financial transactions, influencing how a business's health and performance are portrayed. Accrual accounting tends to provide a more accurate reflection of a company's financial status over time, especially for entities extending credit or dealing with large inventory management. Conversely, cash accounting offers simplicity and immediate cash flow insights but may distort the true financial picture. Businesses must evaluate their operational complexity and reporting requirements to determine which method best supports their objectives, emphasizing the importance of understanding these foundational accounting principles for effective financial management.

References

1. Anthony, R. N., & Govindarajan, V. (2014). Management Control Systems (13th ed.). McGraw-Hill Education.
2. Graham, J. R., & Harvey, C. R. (2001). The Theory and Practice of Corporate Finance: Evidence from the Field. Journal of Financial Economics, 60(2-3), 187-243.
3. Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2013). Introduction to Financial Accounting (11th ed.). Pearson.
4. Jeter, D. C. (2020). Financial and Managerial Accounting. Cengage Learning.
5. Republic of the Philippines. (2017). The Philippine Accounting Standards (PAS). Financial Reporting Standards Council.
6. Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial Accounting Theory and Analysis: Text and Cases (12th ed.). Wiley.
7. Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2018). Financial Accounting (10th Edition). Wiley.
8. Zimmerman, J. (2014). Accounting for Decision Making and Control (8th ed.). McGraw-Hill Education.
9. International Financial Reporting Standards (IFRS). (2023). IFRS Foundation.
10. U.S. Securities and Exchange Commission (SEC). (2023). Financial Reporting Manual. SEC.gov.