Accounting Decisions Discussion

1. One of the first decisions a new company must make is whether to use a cash based or accrual based system of reporting. Explain three factors a company must consider when deciding which accounting method to use.  Discuss how each method would affect these factors.  If you were to open your own business, which reporting method would you choose? 2. You have been working long hours trying to calculate and prepare adjusting entries.  You have now decided this is too much work and you will not bother to prepare these entries in the future.  Discuss the purpose of adjusting entries, and whether or not you have made the correct decision.  Provide specific examples as to why or why not you believe this is the correct decision.

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