As a result, accrual accounting provides more precise information on the current situation, while cash-basis accounting defers all credit transactions to a later date. Unlike cash basis, accrual basis accounting plans for the future success and growth of the company, not just the present situation.Accrual basis accounting is more complicated compared to cash basis accounting and often intimidates those who do not understand it. Concerns of errors and mistakes because of its complexity arise, but with the development of technology and software in today’s world it minimizes the chances. Also with technology to assist in the accounting process accrual basis becomes more effective and cheaper in most cases. Although accrual basis accounting is more complex than cash basis accounting it is a better and more preferred method for business the world over.ReferencesHeilbroner, R., & Milberg, W. (2008). The making of economic society. (12 ed.). Upper Saddle River: Pearson.Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2009). Financial accounting, tools for business decision making. (5th Edition ed.). Wiley.
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