6.24 In its first year of operations, Benson Pty Ltd earned $160 000 in services revenue, $24 000 of which was on account and still outstanding at the end of the reporting period. The remaining $136 000 was received in cash from customers. The company paid expenses of $40 000 in cash. Included in the $40 000 paid is $15 000 for insurance coverage that will not be used until the second year. Additionally, there is $22 000 still owing on account at the end of the reporting period.

1. Apply cash accounting to calculate the first year profit of Benson Pty Ltd.

1. Apply accrual accounting to calculate the first year profit of Benson Pty Ltd.

1. Debate which basis of accounting you think is more useful for decision making.