Let's examine accrual accounting. Why not just use the simple cash basis? What are some of the benefits of using accrual accounting?

What type of important information is ignored by cash basis accounting?

Why do companies prepare adjusting journal entries?

Would you apply cash basis accounting or accrual basis accounting if you were a business owner? Please explain.

An accounting firm received $5,000 cash for consulting services to be rendered in the future. The full amount was credited to Unearned Service Revenue. If the consulting services were rendered by the end of the accounting period and no adjusting journal entry was made, what would be the impact on the financial statements?

A company received a check for $18,000 on July 1st, which represents a 3-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $18,000. Financial statements will be prepared on July 31st. What is the adjusting journal entry that should be made at July 31st?

Randy Company purchased $2,000 of supplies during the month. At the end of the month, $300 of supplies remained. There were no supplies at the beginning of the month. Prepare the adjusting journal entry at the end of the month.