1.Identify the advantages and disadvantages of using the

| June 2, 2016

Question
1.Identify the advantages and disadvantages of using the cash–basis method of accounting.
Under the cash–basis method of accounting, only cash transactions are recorded in the books of account. Using this type of accounting, only cash receipts and cash payments are treated as revenue and expenses respectively.

Consider the features of cash-basis accounting and respond to the following:
Discuss some of the advantages or disadvantages of using the cash–basis method of accounting. Provide some examples.

2. Choose an appropriate method of depreciation for each type of asset
There are various methods of depreciation of assets. The methods of depreciation include the straight-line method, units-of-production method, and double-declining balance method.

Consider the methods of depreciation and respond to the following:
What are the various points or factors you would consider while choosing a method of depreciation for plant and equipment of an electricity company? Explain with examples.

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