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Double-entry Accounting Services begin operations on July 1. It allows its clients 90 days to pay for services received. On the other hand, the company's suppliers require payment for their goods and services within 30 days. Double-entry prepaid its office rent for 12 months on July 1. At the end of the year, December 31, the company had yet to pay its last month's utility bill.
Instructions:
Explain how cash and accrual basis accounting would handle each of the events described above. Use the column heading s shown below.
Event Cash Basis Accrual Basis
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