Cash basis accounting versus accrual basis accounting:

Given the following information

On August 1, Richardson Company received $9,300 for six months of rent in advance.

Accrual accounting affects the Income Statement and the Balance Sheet. Consider the information above. Construct an Income Statement for August 30 and December 31 using only cash basis accounting and then another statement for August 30 and December 31 using accrual accounting.

Discuss the differences between the two August 30 Income Statements and the December 31 Income Statements.Use the following to guide you:

Cash Basis Income Statement Accrual Basis Income Statement

Revenues Revenue

Less Expenses Less Expenses

Net Income Net Income