Asked by Grace Dillon on Jul 04, 2024
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Under the cash basis of accounting,no adjustments are made for prepaid,unearned,and accrued items.
Cash Basis
An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.
Adjustments
Entries made in accounting records to correct or update financial information.
Accrued Items
Expenses or revenues that have been incurred or earned but have not yet been recorded or paid.
- Master the differentiation between accounting on an accrual basis and a cash basis.
- Comprehend the pivotal role of adjusting entries in financial statement compilation.
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Learning Objectives
- Master the differentiation between accounting on an accrual basis and a cash basis.
- Comprehend the pivotal role of adjusting entries in financial statement compilation.
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