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Unformatted text preview: When sale is made When bill is received • Complies with GAAP • Presents accurate financial picture CASH • Records transactions only when cash is received or paid When customer pays for product or service When bills are paid • Only used by very small businesses • Omits important info Accrual Accounting and Cash Flows • Accrual accounting records both cash and non-cash transactions Cash Collecting from customers Paying for expenses Borrowing money Issuing Stock Non-cash Sales on account Purchases on account Using prepaid expenses, such as supplies...
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- Spring '11
- Financial Accounting, Generally Accepted Accounting Principles, normal balance, normal debit balance