Assignment Overview
In this week’s assignment, you will use the journal that you created in Week One to complete a journal entry exercise. The purpose of this exercise is to provide you with hands-on experience in creating a cash basis accounting and an accrual basis accounting.
To complete this assignment, you will need to follow these steps:
Using the transactions that you recorded in your journal from Week One, create a cash basis accounting in a spreadsheet program (such as Microsoft Excel or Google Sheets).
Next, create an accrual basis accounting using the same transactions from your journal.
Compare and contrast the results from the two accounting systems. What are the differences between the two?
In a Word document, write an essay (2–4 pages) explaining your experience with the journal entry exercise and the differences between the cash basis and accrual basis accounting systems. Be sure to address the following questions in your essay:
Questions that will help with the essay.
What did you learn from creating both a cash basis accounting and an accrual basis accounting?
How did this experience change your understanding of accounting and the purpose of the two accounting systems?
What are the benefits and limitations of each system?
How could this information be useful to a business owner?
Guidelines
Make sure to carefully read and follow the above instructions for the assignment. Submit your Word document and your spreadsheets with the journal entries to the Week Two assignment in Canvas by the due date.