week 3 discussion

1. Explain the major advantages and disadvantages inherent in using both the cash and the accrual basis of accounting and determine one (1) that you believe provides the most useful financial information to users. Identify at least 2 types of businesses that would benefit by preparing financial statements using either the cash of accrual basis of accounting. Justify your response.

2. Define the generally accepted accounting principles that justify making adjusting entries, and speculate on the primary impact to investors and credits if companies did not make adjusting entries until the end of the calendar or fiscal year.