Reference no: EM132545658

Question a) In your words explain clearly, how is profit determined under (a) the cash basis of accounting and (b) the accrual basis of accounting? Why is the accrual basis of accounting generally preferred over the cash basis?

Question b) Using your own analysis, explain why the purchase of supplies is usually recorded in an asset account rather than in an expense account. If supplies were expensed when purchased, which accounts should be debited, and which credited at the end of the period in order to

Question c) What type of business is most likely to select a fiscal year that corresponds to its natural business year instead of the calendar year ?

Question d) Using your own analysis, how would the financial results from using the three alternative inventory costing methods change if the company had been experiencing decreasing prices in its purchases inventory ?