Your friend, Mark, owns the dog sitting company, Mark's Dogs, out of his home.  He watches a maximum of 5 dogs at a time at his home, with the dog owners dropping the dogs at his home. Terms of service require payment in cash or check when the owner retrieves the dog.

Mark's business has grown, and Mark will be moving into an empty storefront that is large enough for him to watch 20 dogs at a time. Regarding this expansion, he will be moving from a cash-only business to an accrual-based business.

Discuss:

• Inform Mark about the new accounts created when a business moves from a cash-only to an accrual business.
• Would the nature of Mark's business require any period-end adjustments? If so, which ones?
• If Mark accepts credit cards, will this be recorded as cash? Explain.

Answer rating: 100% (QA)

Informing Mark about New Accounts in AccrualBased Business When Mark transitions from a cashonly business to an accrualbased business he will need to ... View the full answer