***Please Answer Quickly***

INFO:

The famous singer Rihanna is going on a tour. She plans to perform in a concert on Sept 30th. Her agent is handling her financial transactions and recorded $400,000 in revenue from the ticket sales in September. As of July 1st, Rihannas accountant noticed the financial statements reflect all of the revenue from the September ticket sales, a concert yet to be held. The accountant has these questions for the manager.

QUESTIONS:

Which accounting method was used? Explain why you believe this method was used.

Did the agent correctly record the transaction under GAAP? Why or why not?

Explain which GAAP principle applies to this scenario.

Has her agent recorded this transaction correctly if he uses cash accounting?

Is this recorded correctly if he uses accrual accounting?

What is the effect of this transaction on the financial statements?

How should he record it if he wants to follow GAAP?

Why do you think GAAP recognizes accrual-based accounting and not cash based accounting? What are its benefits?

How would accrual-based accounting help them better manage their business?

If you set up your own small business, should you use cash accounting or accrual accounting? Why?