The Accrual Basis of Accounting Is a System That Attempts

question 10

Essay

The accrual basis of accounting is a system that attempts to measure changes in economic value in an entity as they affect the accounting equation, regardless of the timing of actual cash flows.
Required:
First, describe the timing of revenue and expense recognition under the accrual basis versus the cash basis of accounting.Then, give two examples of (1)a revenue-related transaction and (2)an expense-related transaction that would be reported at significantly different points in time using the accrual basis versus the cash basis.