Part 1.

How are revenues and expenses reported on the income statement (Statement of Operation) under

(a) the cash basis of accounting vs. (b) the accrual basis of accounting?

Which basis is the one required and compatible with US GAAP and/or IFRS (International Financial Reporting Standards set by IASB, International Accounting Standard Board, HQ in London now)?

Part 2.

Why are adjusting entries needed at the end of an accounting period? What happen (effects) if one forgot to make those adjusting entries to the books?