you have recently been hired by Smith & Jones, a small public accounting firm as an internal auditor. One of the firm's partners, Jeffrey Jones, has asked you to deal with an unhappy client. The client, Joan Silverberg, is the owner of the city's largest jewelry store, DiamondsRUs. Ms Silverberg wants to remodel her store and is applying for $300,000 loan with First National Bank. The bank requires the use of accrual basis accounting for financial statements. Ms Silverberg insists that she has always used cash basis accounting for her jewelry store. She does not see the purpose of using accrual basis accounting and refuses to make year-end adjusting entries.

Required:

Write a (friendly) short email to Ms Silverberg to include the following:

1. Proper Salutation

2. Introductory paragraph stating your name and job title at the firm. (You can make this up.)

3. Explain the main differences between cash basis and accrual basis accounting.

4. Explain why the FASB requires the use of the accrual basis accounting for financial external reporting and why it would be beneficial for her to switch to the accrual basis.

5. Closing sentence requesting to meet with her in person sometime next week.