Create a table comparing and contrasting the basic elements of cash and accrual accounting.How do the methods compare? How are they different? What are the strengths of each method? What are the weaknesses of each method? Include a column in your table to address each of the following: comparison, contrasts, strengths, and weaknesses
Answer:
| Cash Bases of Accouting | Accrual Bases of Accouting | |
| When Revenue Recorded | Under the cash basis of accounting revenues are recorded in the financial statement in the period in which the cash is received from customers |
Under the accrual basis of accounting revenues are recorded in the financial statement when they are earned and generally often occurs before |
| When Expanses recorded | Under the cash basis of accounting revenues are recorded in the financial statement in the period in which the cash is paid |
Under the accrual basis of accounting revenues are recorded in the financial statement when expanses are occur or when they expire |
| Who provide better Picture | Cash Basis of Accouting do provide as true income or liability picture of the company during the particular period as accrual basis gives | Generally Accrual Basis of Accouting provide better picture of the company during the particular period |
| availability of the method for use | This method is available for the use if a company has not more than $5 million of sales per year | This method is used by all large company for many reasons |
| tax reporting | When sales does not exceed $5 million, this method can be used | When sales exceed $5 million ,this method is compulsory to use |
| weaknesses or strengths | The main weakness of this method is that ,it does not provide true profitability during the period because revenues and expenses are recorded when they are actually received or paid | The main strengths of this method is that ,it provide true profitability during the period because revenues and expenses are recorded when they are occur |
