Please reply to the following posts with a short response of your thoughts and option on their post.

Post #1

In Accrual Basis accounting everything is recorded when the transactions are recognized. In cash basis accounting the transactions are not actually recoreded until there is an actual exchange of cash. The accrual basis of accounting is usually prefered because it not only shows the money a company has paid or the money the company has actually recieved but, It also shows how much a company owes and is owed. This gives a better overall view of how well the company is standing.

Post #2

When opening a company, one of the first decisions necessary is to determine the accounting basis: cash or accrual basis. The accrual basis of accounting generally preferred over the cash basis in communicating results. The accrual basis of accounting is a method of recording journal entries on the date when the event takes place. That is, on the document date of the income or expense performed. It does not matter when it will be paid or received, but when the transaction took place. The cash basis is the opposite of the accrual basis. In this case, expenses and income are recorded at the time of payment and receipt, similar to a bank account.

Post #3

The closing process is a 4 step process.

1. Close Revenue Account.
2. Close Expense Account.
3. Close Income Summary to the Retained Earnings Account. .
4. Close the Dividend Account to Retained Earnings.

The accounts that are affected are the revenue account, expense account and dividend accounts. The asset, liability, common stock and retained earnings accounts are still opened. The two purposes of the closing process is to make the account back to zero and to figure up the net income of the company. When a company records a closing entry, it will then be able to start a new entry with the balance of 0. This makes it easier for companies on a year-to-year basis.

Post #4

The closing process happens after the financial statements have been completed at the end of the accounting period. (Wild et al, 2021). Three steps are involved in the closing process: identify accounts for closing, record and post-closing entries, and post-closing trial balance (Wild et al, 2021). During the closing process, it resets account balances to zero so that they can be measured for the next period. Retained earnings balance is updated, this reflects the same as the balance sheet (Wild et al, 2021). Only temporary accounts are affected by closing entries, while permanent accounts are not closed and balances are carried over