Question

PLEASE NOTE: AUSTRALIAN

Describe cash accounting and accrual accounting systems and the relevant advantages and disadvantages of each. (150-180 words)

Answer 1

ANSWER:-

Describing about cash accounting and accrual accounting system and there advantages and disadvantages .

• Which means of money accounting in real money premise of accounting, we records any business exchange in books and records just when if there are money pay or get from exchange.
• Which means of accumulation accounting In this accounting we records all business exchange in the year in which they happened. We not consider money installments and receipts from exchange.

Advantages of cash system :

1) This strategy is simple in comprehension.

2) Widely use by independent company on the grounds that their are adaptability and simple to keep up records in this system.

3) This technique show all incomes during a period.

Disadvantages of cash system :

1) This strategy isn't helpful for huge business firms and organizations.

2) This strategy don't give right benefit and misfortune, money related situation of an association.

3) This technique not permitted to us by laws, IRS.

Advantages of accrual accounting :

1) This arrangement of accounting ascertain right benefit and misfortune, money related situation of an association.

2) This strategy is affirmed for use by IRS and other pertinent laws.

3)This strategy show right long haul incomes of organization.

Ddisadvantages of accrual accounting :

1) This is helpful for huge business firms and organizations, not possible for private venture substance.

2) There is a lot of complex being used and understanding than money framework.