1. Running head: SUMMARY QUESTION ONE 1
Summary Question One
Jacqueline L. Gonzalez
ACC/290
April 23, 2014
Professor Lawanda Lester

2. SUMMARY QUESTION ONE 2
Summary Question One
Commercial accounting is a precise likeness of professionaldealings. Commercial
accounting can only be acquired if both dealings are implemented, may it be cash or credit and it
be accepted and logged in such a way that there is no doubling and until now the deals are
loggedbelow the commercial accounting. It is completed in anorganization known as double or
dual entry book keeping or commercial accounting structure which logscash and creditfeatures of
dealings. It as wellregisters credit contracts in cash accounting date of delivery. In commercial
accounting the day in which the dealings are made requires it to be chroniclednevertheless if it is
waged or not.
General accepted accounting principle (GAAP) is the assortment of values and
observations required to be used by firm’s to record and hand over the marks of their
commercialmovements and their accounts of what they will be in debt.
Accrual basis accounting correctlybalances your revenue and expenditures, but if this
technique is not accomplishedcautiously you could lose the trail of your genuine cash movement.
For instance you my well be logging lots of revenue for contractsfinalized, but not being
paiddisbursements on a operation. Underneath accrual basis business deals that alter a business’s
financial reports are logged in which the arrangementsarise. The
incomedifferentiationcorrespondingideologies are used below the accrual basis. Underneath the
accrual basis accounting proceed is logged when money is received and expenses are recorded
when cash is compensated. Generally accepted accounting ideologies require accrued basis
accounting.

3. SUMMARY QUESTION ONE 3
The cash basis processprovides you a flawless image of your cash movement it does not
give you a decentimpression of the business’s extended term effectivenesssince you do not
record income when it is trulyreceived and expenses when they are not paid for the job until
many months later. Cash basis accounting does not do a good job of matching income with the
expenses incurred to earn that income.
In conclusion, accountants recommend that accrual basis method for most small
business’s but if the business is a true cash business you may want to use the cash basis
accounting method.