HSM 340-Week 2-Homework-Brandi Long.docx - Brandi Long...

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Brandi LongHSM340Week 2: Homework1.Accrual accounting is a fundamental premise of accounting. It means that transactions ofa business enterprise are recognized during the period to whichthey relate, not necessarily during the periods in which cash is received or paid. Accrualaccounting recognizes revenue when it is earned and at the time the expenses are billedfor, not paid. Cash accounting recognizes the revenue and the expense when money isreceived. Cash and accrual accounting difference is the time in which the sales andpurchases were recorded in the accounts.2.The accrual basis of accounting significantly affects the preparation of financialstatements in general; however, its major impact is on the preparation of the statementof revenues and expenses. The accrual basis of accounting gives a long-term view of thefinances, it accounts for the money expected to come in.3.Audits represent assessments of objectivity, by which the management of a company
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Term
Spring
Professor
N/A
Tags
Balance Sheet, Income Statement, Revenue, Expense, Generally Accepted Accounting Principles, Double entry bookkeeping system

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