Discuss the differences between cash and accrual accounting. What is one significant advantage of accrual accounting over cash accounting?

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The Answer is Cash accounting records revenues when the cash is actually received, whereas accrual accounting records revenues when they are earned. Cash accounting records expenses when cash is actually disbursed or paid out, whereas accrual accounting records expenses when resources are used. Accrual accounting matches revenues and expenses in the same period, and is in compliance with GAAP.

Discuss the Differences Between Cash and Accrual Accounting