ACCT 105 American Public University Week 2 Cash and Accrual Basis Accounting HW The Accounting Cycle The Week 2 Forum consists of two separate questions.

ACCT 105 American Public University Week 2 Cash and Accrual Basis Accounting HW The Accounting Cycle

The Week 2 Forum consists of two separate questions. You will answer one of the two questions. The chosen question needs to be answered with an initial post.

Pick only one question:

(1st question) What are the differences between cash and accrual basis accounting? Provide an example of each type. Briefly explain why a company might need to adjust entries in the general ledger.

(2nd question) Evaluate how the appearance of solvency for a business changes when using cash vs. accrual accounting, noting which stakeholders might be affected and how.

Instructions: Your initial response should have extensive words (at least 250 words). Please use reference in APA format.

This week we will explore Chapter(s) 3 and 4 of the textbook. Chapter 3 examines debit and credit rules and discusses the steps in the accounting cycle. The chapter specifically addresses the journal and ledger and introduces horizontal and vertical financial analysis. Chapter 4 addresses the cash and accrual bases of accounting and provides a detailed look at the need for adjusting entries and the different classes and types of adjusting entries accountants use.