Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 4 - Accrual Accounting Concepts - Questions: 2

Answer

(a) The Generally Accepted Accounting Principles (GAPP), that relate to adjusting the accounts are as under: i) Accrual Versus cash basis of accounting ii) Matching Principle

Work Step by Step

i) Accrual basis of accounting means that transaction are recorded in the periods in which the event occurs, even if cash is exchanged before or after that period. ii) Let the expenses follow the revenues in the period when efforts are expended generate revenues.
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