Choose the situations below and provide the following information: a) type of change; b) Manner of reporting the change under the current generally accepted accounting principles, including a discussion where applicable of how amounts are computed; c) Effect of the change on the balance sheet and income statement.

Situation 1:

Sanford Company is in the process of having its first audit. The company has used the cash basis of accounting for revenue recognition. Sanford president, B.J. Jimenez, is willing to change to the accrual method of revenue recognition.