Cash accounting has the advantage of simplicity and objectivity but it provides an incomplete picture of an organization's financial status. On the other hand, accrual accounting does inject subjectivity into the financial statements. Consider an outstanding patient account receivable. Is it merely a timing issue with collection not in doubt, or is the bill being disputed by the insurer, with collection an uncertainty. In the latter case, management will make a judgment call on whether to include that bill as revenue. They might discount it (i.e. record at less than full value), write it off completely, or record it at full amount, which will affect the revenue for that accounting period.

What are your thoughts on the trade-off between the two methods?