Cash basis of accounting Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid. Accrual basis of accounting: Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged. To determine: The Company’s net earnings on accrual basis for the year 2017.

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Chapter 4, Problem 4.4E

To determine

Cash basis of accounting

Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid.

Accrual basis of accounting:

Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged.

To determine: The Company’s net earnings on accrual basis for the year 2017.

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