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Question
1. There are two types of accounting methods, which dictate how the company`s transactions are recorded in the company`s financial books: cash-basis accounting and accrual accounting. Which method do you think is best to use and why?
2. Accrual basis accounting requires transactions to be recorded at the times of their occurrence. Since invoices do not coincide with actual events, this approach necessitates some estimation and guesswork on the part of accountants working under accrual basis accounting. Although this is perceived as a disadvantage how would you use this to your benefit?
