There are two accounting principles that are used to determine the net result of the projects work, whether profit or loss, for a specific financial period. These two foundations are: the accrual basis and the cash basis.

Required :

$1-$ Explaining the concept of accrual basis and cash basis, and in what type of establishment each of them is used

$2-$ Discuss the advantages and disadvantages of the accrual basis.

$3-$ Discuss the advantages and disadvantages of the monetary basis.

$4-$ Explaining why some companies switch from a cash basis to an accrual basis.

second question :

Inventory is considered one of the most important items of current assets, due to its relative importance, whether in commercial or industrial projects.

Required :

$1-$ Explaining the concept of commodity inventory, and discussing ways to manage commodity inventory optimally

$2-$ There are several methods that are used to evaluate commodity inventory. Explain $3$ methods for determining inventory cost, supporting your answer with practical examples of each method

$3-$ Explaining the impact of using these methods on the cost of goods sold and on the income statement, through the examples that were explained by the student.

The third question :

Inventory adjustments are considered an accounting process that is performed at the end of the financial period with the aim of determining the business results during the accounting period and verifying the financial position of the facility, by reconciling the accounts and adjusting their balances in order to determine the expenses and revenues of each accounting period separately.

Required :

$1-$ Clarifying the objectives of inventory adjustments

$2-$ Determine the differences between inventory and inventory adjustments

$3-$ Identify four cases of inventory adjustments through which:

A$-$ Conducting the accounting treatment through a practical example proposed for each case separately

B$-$ Statement of the impact of these adjustments on the financial statements $($income statement and financial position statement$)$

Answer rating: 100% (QA)

Question 1 Accrual Basis vs Cash Basis 1 Concept of Accrual Basis and Cash Basis Accrual Basis Under the accrual basis of accounting transactions are recorded when they occur regardless of when cash i... View the full answer