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ACC 290 Week 2 DQ1 2
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Accrual accounting is the reporting of revenues and expenses in the period of time that they occur, even if payment was not received or paid. Generally accepted accounting principles state that all revenues and expenses need to be reported during the time period that they occur. The cash-basis of accounting is the recording of revenue and expenses when payment is received and paid-out. This form of accounting violates the generally accepted accounting principles because it goes against the revenue recognition and the expense recognition principles. The cash basis of accounting is usually used in businesses that receive payment at the time of sale and that do not use or extend any type of credit.

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