Microsoft Corp. follows the accrual basis of accounting for recognizing revenue and expenses.

Values:	Year 1	Year 2
Revenue Earned	$50,000,000	$60,000,000
Expenses Incurred	$30,000,000	$35,000,000

• Requirements:
  1. Apply the accrual principle to recognize revenue for Microsoft Corp. in Year 1 and Year 2.
  2. Explain how the accrual principle impacts the timing of revenue recognition.
  3. Discuss the advantages of using the accrual basis over the cash basis of accounting.
  4. Recommend strategies to ensure compliance with the accrual principle at Microsoft.