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    Accrual Basis Accounting

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    Accrual Basis Accounting Accrual accounting is a system of accounting that is based on the accrual principal accounting. This principal requires revenue to be recognized and recorded when earned. Expenses are to be recorded when they occur. The accrual basis of accounting is used by most companies. Very small businesses and individuals use cash basis accounting. The major distinction between the accrual and the cash basis of accounting is when revenue and expenses are recognized. When the cash

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    methods of record keeping; that is the accrual basis method and the accounting basis method. Using one method throughout accounting period and then changing it at the end while determining profit, might introduce a form of biasness and hence resulting in inaccurate figures. The two methods are completely different in terms of how revenue and expenses are recognized and recorded. As a result, the accounting for profit between the two is also poles apart. In the accrual based method, revenues and expenses

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    5 2.2 Accrual accounting 5 3. Conclusion 6 4. Recommendations 6 References 7 1. Introduction This report briefly introduces the current financial position of Revive Marketing, and discusses the reasons behind these financial data. The main issue discussed in this report is why an improvement of profit has been noticed during the accounting period while cash position has not been increased. This report contains information that is calculated under accrual accounting

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    Cash and Accrual Accounting are two elemental accounting methods that are essential to keep records of the expenses and income of a business (Zarandi, et al., 2013).Therefore throughout this essay I will be discussing the advantages and disadvantages of each method in order to conclude which accounting method is more useful for a business. Cash accounting is more favoured especially for small businesses whereby the income is only counted when the payment is received and the expenses are practically

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    In today’s world there is a lot of discussion of how effective are accruals and going concern concepts are been regarded as fundamentals during the making of financial statements. Many people believe that there are a lot of pros and cons of these types of concepts. There is also another discussion on how difficult to apply these sorts of concepts (going concern and accrual concepts). Going concern are like assumptions in accounting from which financial statements are created for every business.

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    The Government Accounting Standards Boards 45

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    GASB 45 The Government Accounting Standards Board (GASB) issued Statement 45 (GASB 45) in June 2004; this statement establishes accounting and reporting standards for post-employment benefits other than pensions, or “other post-employment benefits (OPEB),” offered by state and local governments. It requires local governments to actuarially determine their annual required contribution (ARC) to fund OPEB and to account for the unfunded amount as liabilities on annual financial statements. Government

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    Accounting deals with internal and external users. External users are the investors, customers, suppliers, employees, authorities, and creditors that use the information about the firm to make decisions regarding their future relationship with that firm. The information that they look at to make these decisions are the financial statements. Each of these external users may use the financial statements differently. An investor may look to see if it is worth investing in that specific company;

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    Accrual Accounting Essay

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    5. Financial statements are prepared under the accruals basis of accounting rather than on cash basis. Under accruals basis of accounting, an entity must account for the prepaid expenses, prepaid revenues, accrued expenses and accrued revenues. Discuss in detail each type of the transactions and provide example in the discussion. A financial statement or report is a formal record of the financial activities and position of a business, other entity, or person. Relevant financial information is

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    outcomes based on accrual based accounting to show their performances with well-made the financial statement. Because of this, some have argued which method, accrual based or cash based accounting, is better for investors, creditors, other users and firms. Under U.S. GAAP, the cash basis is a method of recording accounting transactions for revenue and expenses only

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    Q3 Accrual accounting is an accounting method that recognizes economic events regardless of when cash transactions occur in order to measure the performance and position of a company. The general idea is that economic events are matching revenues to expenses to recognize which is the matching principle at the time in which the transaction occurs rather than when payment is made (or received). This method allows combining the current cash inflows or outflows with future expected cash inflows

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