Discusion question

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1. Watch Video: “Cash and Accrual – Conceptual” (4:44)

  • Click here to open the video in a new window.
  • Based on the video, explain two (2) advantages and two (2) disadvantages in using both the cash and the accrual basis of accounting.
  • Then, determine the one (1) that you believe provides the most useful financial information to users.
  • Identify at least two (2) types of businesses that would benefit by preparing financial statements using either the cash or accrual basis of accounting.

2. Accounting Adjustments

  • Discuss whether or not you believe gift cards should have an expiration date. Based on your response, what is the implication related to the accounting treatment of the transaction.
  • Discuss closing entries and reversing entries.
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