Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions. Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions. To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

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Answer 1

Question

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

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Answer 2

Question

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

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Answer 3

Question

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

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Answer 4

Question

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

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Answer 5

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

Answer 6

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

Answer 7

Chapter 3, Problem 2DQ

To determine

Accrual Basis Method of Accounting: Accrual basis of accounting is a method wherein the business transactions are recorded in accounting books on accrual basis that is when revenue is earned or expenses are incurred irrespective of cash being received or payment being made for the respective transactions.

Cash Basis Method of Accounting: Cash basis of accounting is a method wherein the business transactions are recorded in the accounting books only when cash is received or cash payment is made for the respective transactions.

To Identify: Reason for accrual Basis of accounting preferred over the cash basis.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 3 - A company forgot to record accrued and unpaid...Ch. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - Prob. 3MCQ Ch. 3 - On November 1, Stockton Co. receives $3,600 cash...Ch. 3 - Prob. 5MCQ Ch. 3 - Prob. 1DQ Ch. 3 - Prob. 2DQ Ch. 3 - Prob. 3DQ Ch. 3 - Prob. 4DQ Ch. 3 - Prob. 5DQ

Solution Summary: The author explains that accrual basis gives a clear and sorted representation of the transactions without misleading the revenues and expenses. Accrual Basis is preferred by Generally Accepted Accounting Principles (GAAP) and Internal Revenue Service

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