You will answer one of the two questions. The week two forum consists of two separate questions choose one. The chosen question needs to be answered with an initial post.
Pick only one question:
(1 st question) What are the differences between cash and accrual basis accounting?
Provide an example of each type. Briefly explain why a company might need to adjust
entries in the general ledger.
(2 nd question) Evaluate how the appearance of solvency for a business changes when
using cash vs. accrual accounting, noting which stakeholders might be affected and how.
Instructions: Your initial response should have extensive words (at least 250 words).
Please use reference in APA format.
This week we will explore Chapter(s) 3 and 4 of the textbook. Chapter 3 examines debit
and credit rules and discusses the steps in the accounting cycle. The chapter specifically
addresses the journal and ledger and introduces horizontal and vertical financial
analysis. Chapter 4 addresses the cash and accrual bases of accounting and provides a
detailed look at the need for adjusting entries and the different classes and types of
adjusting entries accountants use.
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