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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 55
Comparing accrual and cash-basis accounting
The Johnny Flowers Law Firm uses a client database. Suppose Johnny Flowers paid $2,900 for a computer.
Requirements
1. Describe how the business should account for the $2,900 expenditure under
a. the cash basis.
b. the accrual basis.
2. State why the accrual basis is more realistic for this situation.
The Johnny Flowers Law Firm uses a client database. Suppose Johnny Flowers paid $2,900 for a computer.
Requirements
1. Describe how the business should account for the $2,900 expenditure under
a. the cash basis.
b. the accrual basis.
2. State why the accrual basis is more realistic for this situation.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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