Encryption Connection is buying the first computer for its new server farm. Suppose the company paid $5,000 for this computer, which it expects to last for three years. Describe how the company would account for the $5,000 expenditure under (a) the cash basis and (b) the accrual basis. Which basis is more realistic for this situation? a How would the company would account for the $5,000 expenditure under the cash basis? Cash Basis b. How would the company would account for the $5,000 expenditure under the accrual basis? Accrual Basis Amount The unrealistic Amount basis is more realistic because the computer is an asset. The computer should be amortized over its useful life. To record the cost of the computer as an expense is