Monday, October 10, 2016




Week 2 EOC, Chapter 2 Question 4



a. Lauras cash accounting showed less of a loss a (7,850) as to Lisa who showed a loss of (10,750). Essentially showing that lis has a higher "net profit"

b. Laura's cash accounting method seems to show more accurate with money on hand. "system is a method that records revenue as being earned when it is actually received. Likewise, expenditures are recorded when they are actually paid, regardless of when they were incurred

c. Lisa's Accrual method shoes the most accurate for revenues generated regardless of when they were recieved. "revenue is recorded when it is earned, regardless of when it is collected, and expenses are recorded when they are incurred, regardless of when they are paid."

d. Lauras cash accounting methond is the most accurate to show expenses incurred regardless of when they were paid.

e. Lisa's Accrual accounting method is most accurately shows actual cash inflows and outflows. "In general, the sources and uses of funds you need for cash flow from investing activities will come from your long-term assets (investments, property and equipment, and other assets). The exception to this is marketable securities, which is a current asset that belongs in investing activities.

f. Lisa's Accrual accounting method shows the most accurate relection of true profitability

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