Accounting
In just about any part of the world, accrual accounting is preferred by government over cash accounting, for several good reasons. To understand these reasons, the first step is to understand what the difference is between accrual accounting and cash accounting. Cash accounting is a standard form of accounting for very small businesses and for households, where the entire basis of accounting is the cash flows in and out. Under the cash method, income is not counted until the cash is received, and expenses are not recorded until the cash goes out (Fishman, 2013). This principle treats cash flow as the only thing that matters. It is often used by very small businesses because it mirrors their daily reality -- cash is the only thing that really matters.
Accrual accounting is based on a different principle altogether. Accrual accounting is based on the idea that transactions are recorded when they occur, rather than when the cash moves (Shanker, 2013). The timing of the cash flows is not actually all that important in accrual accounting, save for the cash flow statement. For the income statement, it only matters when the transaction occurs (SBA.gov, 2013). The key date is the job completion date -- when a sale is formalized (No author, 2013). So with accrual accounting, the cash might arrive later, but if the sale occurs today, it is recorded today, along with an accounts receivable entry. When the cash arrives, the accounts receivable is reduced and the cash account increased to account for the change in cash position, but the sale at this point has...
Accounting Career Choice Accounting has become one of the most popular degree choices in recent years because it can lead to a great deal of careers that can be much more exciting than they may initially sound. The problem for the student who chooses to follow a desire to get into accounting may be that they realize after they have taken a few classes that they will have to choose between
Accounting and the Public Interest: The accounting profession is not only an integral aspect of the society but it also plays a critical role in the nation and the corporate sector. As a result, this profession is expected to serve or contribute towards the public interest. The ability of the accounting profession to contribute towards the public interest is determined in the context of its standard setting process and legislation. In
Accounting Systems There are many ways in accounting to get the job done right but two basic approaches give accountants a foundation to work upon. The purpose of this essay is to examine the differences between manual and computerized accounting systems. This essay will explain the history and development of both types of systems and will break down the advantages and disadvantages of them as well. Explanation and History of the Manual
Accounting Qualitative Characteristics of Financial Statements There are four principal qualitative characteristics that make the information provided in financial statements useful to users. These are understandability, relevance, reliability and comparability. The first section of this paper will be dedicated to explaining each of these concepts and how they relate to making financial statements more valuable for the audience. The first principal qualitative characteristic is understandability. This relates not only to the information but
Accounting Several terms and definitions are valuable to understand financial statements. In the United States, financial statements of public corporations are produced in accordance with the U.S. Generally Accepted Accounting Principles. These principles govern how the information for financial statements is compiled and presented. The purpose of these principles is so that all stakeholders can easily understand the statements and make comparisons across both time and across different companies, because the
Accounting internal control is the methods and procedures used to ensure the accuracy and validity of the financial statements, as well as to protect against abuse and fraud, making sure information is delivered in an accurate and timely manner. (Griffin) Internal controls consist of information systems and physical controls that are carried out in the line of job duty. The two primary goals of internal control is to ensure that
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now