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Accrual Basis Accounting: Businesses Record Transactions As They Occur

2629 words - 11 pages

Accrual Basis Accounting:Businesses Record Transactions as They OccurAbstractThe purpose of this paper is to summarize the effects of accuracy and reliability of accrued expenses for financial information provided to users based on academic information. I will evaluate several key factors that are involved in accruing for expenses and how accruals affect a company's financial statements. Included will be GAAP's matching principle and FASB guidance on accruals. Other sources examined will from several academic articles. The results indicate that accruing for expenses maintain the matching concept. Accruals help avoid deceptive income statements that could result from the timing of cash payments.Table of ContentsAbstract …………………………………………………………………………………...2Table of Contents …………………………………………………………………………3Introduction …………………………………………………………………………….....4Literature Review ………………………………………………………………….. …......5Locating Financial Misstatements: Where to Look……………………………....5Accounting for the Costs to treat Environmental Contamination…………………7Coping with FASB Statement No. 106-- "Accounting for Post-retirementBenefits Other Than Pensions…………………………………………………8On the Implementation of Accrual Accounting: A Study of Conflict and Ambiguity……………………………………………………………………..8Depreciation Rules and the Relation between Marginal and Historical Cost…….9The Role of Accruals in Asymmetrically Timely Gain and Loss Recognition…...9On Matching Revenue with Expense……………………………………………10Matching and the Changing Properties of Accounting over the Last 40 Years….10Fuzzy...

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