Individual Assignment - Assessed Discussion Question

ACC/497 Advanced Topics in Accounting Research

Required:

Use FARS to identify what standard-setters have said as to the superiority of

accrual accounting relative to a cash basis. Do you agree with the justification

offered for accrual accounting? Explain.

Bonus Question:

Identify which accounting pronouncement specifically observes: "This

Statement relies on a basic premise of generally accepted accounting principles that

accrual accounting provides more relevant and useful information than does cash

basis accounting."

Accounting Theory Issue:

When is a "cash-basis method" used within the accounting literature? Do you

view such a method as complementary or preferable to accrual accounting in the

settings you have identified?

Would a cash basis be easier or harder to audit than an accrual basis? Why?

Tax Issue:

Does FARS suggest the existence of guidance that sponsors the idea that

certain earnings may be accounted for on an accrual basis while the related income

taxes are accounted for on a cash basis?

When did most not-for-profit organizations change from a cash or "modified cash "basis to accrual accounting?