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Unformatted text preview: position. Plus, anyone who reads your financial statements - stockholders, creditors, security analysts or outside companies - will assume that the reports comply with GAAP. 1c. Under the cash method, sales are not recorded until paid with cash and costs are not considered until paid with a cash disbursement. 1d. Do you agree with Fareeds statement about not needing to understand accounting? No, I do not agree with Fareeds statement for the simple reason that by understanding accounting one can make better sound decisions, can explain and understand the cash flow. If one does not understand accounting how do they know that the numbers they are entering are applied to the right accounts? If the wrong accounts are being used then managers will have the wrong information presented to them and this will keep them from making sound judgments....
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