aecruaL aeeounting Aecrual accounting attempts to match accomplishments (e.g., revenue) and effort (e.g., expenses) on a period-by-period basis. Cash basis accounting is le ss consistent in this regard. In balancing short-run and long-run incentives, then, it would seem aecrual accounting has an advantage. Is this correct? Provide an illustration of a setting in which the proper balance between short-run and long-run incentives is best maintained by examining cash flow, aecrual income, and other events (e.g., order books, market share, and labor tumover) not explicitly identified by the accounting library.

AppendixLO1