Discussion 1, Debits and Credits, Discussion 2 , Accural-based Essay

Discussion 1, Debits and Credits, Discussion 2 , Accural- found Financial Statemets - Essay fountDQ2 The main difference between a cash establish accounting brass and accrued based accounting system is that the cash based system recognizes income when cash is received, while an accrued based system recognizes income when goods and services are shipped or when services are rendered. In an accrued based the income that is not serene at the point of sale becomes an account receivable. I would recommend the handling of a cash based system for small businesses such as a hot dog marketer. The hot dog vendor is dependent on his weekly income to keep the business going. Big corporations are better suited for the use of accrued based accounting. In the service industry it is not uncommon to invoice bills payable loot 30 or net 60. The account receivable and account payable ledgers are very measurable for companies and they can only be created through the use of accrued based accounting .