1. What is the revenue recognition principle?
2. What is the expense recognition (matching) principle?
3. Why are these important to financial reporting and what would be the effect of removing either from the process?
4. Provide an example of how removing either might affect accounting in a given period.
5. What is the difference between the cash basis of accounting and the accrual basis of accounting?
6. Which one would you select for a company that has inventory and why?
7. Does the size of the company make a difference? Explain how.
8. What would be the advantages and disadvantages of using one basis of accounting over the other?
