EOC Week 2: Chapter 2 quiz Question 4

a. The accounting method that shows a higher net profit is Lisa's accrual accounting method; this is due to the fact that it records all amounts of money no matter when they are collected or payed out.

b. The accounting method that  most accurately the amount of cash on hand to pay bills is Laura's cash accounting method, "The major advantage to using a cash accounting system is... simply by looking at the current balance in your checking account you will know how much money you have left to spend."

c. The accounting method that most accurately shows the revenues generated  regardless of when they were paid is Lisa's accrual method, "In an accrual accounting system, revenue is recorded when it is earned, regardless of when it is collected"

d. The Which accounting method which most accurately shows the expenses incurred regardless of when they were paid is Lisa's accrual method, "In an accrual accounting system, and expenses are recorded when they are incurred, regardless of when they are paid."

e. The accounting method most accurately shows actual cash inflows and outflows is Lauras cash method.

f. The accounting method that shows the most accurate reflection of their restaurant’s true profitability is Lauras accrual method.