cashbasisaccountingACC200 - OBJECTIVES THE CASH BASIS OF ACCOUNTING Describe the cash and accrual bases of accounting Describe the revenue recognition

cashbasisaccountingACC200 - OBJECTIVES THE CASH BASIS OF...

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OBJECTIVES – THE CASH BASIS OF ACCOUNTINGDescribe the cash and accrual bases of accountingDescribe the revenue recognition and matching principlesUse the cash basis of accounting to analyze, record and summarize transactions for a businessUse the cash basis of accounting to prepare financial statements (income statement, balance sheet and retained earnings statement) Describe the advantages and disadvantages of the cash basis of accounting
ACCOUNTING CONCEPTS Time Period Assumption Revenue Recognition Principle Matching Principle
CASH VERSUS ACCRUAL ACCOUNTING Cash-basis Accounting Accounting events (transactions) are recorded when cash is exchanged Revenue recorded when cash received Expenses recorded when cash is paid Accrual-basis Accounting Accounting events (transactions) are recorded when the occur

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