accounting question basis of accounting when do you think a company would use cash b 3800069

Accounting question- basis of accounting

When do you think a company would use cash basis accounting versus accrual?  Is this acceptable in these situations?  Why?

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Cash basis accounting is always a better option when it comes to small businesses such as sole proprietorships. New business ventures also find this form of accounting to be better. The reason behind this is that cash accounting method recognized revenue when it actually changes hands. Thus it become very easy to track down revenues. At the same time, losses are recorded when they are incurred. This makes it easier for the business to account for the money in and money out. It also reduces the amount of taxation that is…

APA

166 words

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