Required: The Week2 Forum consists of two separate questions. You will answer one of the two questions. The chosen question needs to be answered with an initial post ofat least 250 words. (1 st...

Required:

The Week2 Forum consists of two separate questions. You will answer one of the two questions. The chosen question needs to be answered with an initial post ofat least 250 words.

(1^st
question) What are the differences between cash and accrual basis accounting? Provide an example of each type. Briefly explain why a company might need to adjust entries in the general ledger.

(2^nd
question) Evaluate how the appearance of solvency for a business changes when using cash vs. accrual accounting, noting which stakeholders might be affected and how.

Instructions:Your initial response should be no less than 250 words.

Week 2: The Accounting Cycle   This week we will explore Chapter(s) 3 and 4 of the textbook.  Chapter 3 examines debit and credit rules and discusses the steps in the accounting cycle. The chapter specifically addresses the journal and ledger and introduces horizontal and vertical financial analysis.  Chapter 4 addresses the cash and accrual bases of accounting and provides a detailed look at the need for adjusting entries and the different classes and types of adjusting entries accountants use.   Week 2: Lesson Objectives Chapter 3 · Use the account as the basic classifying and storage unit for accounting information. · Express the effects of business transactions in terms of debits and credits to different types of accounts. · List the steps in the accounting cycle. · Record the effects of business transactions in a journal. · Post journal entries to the accounts in the ledger. · Prepare a trial balance to test the equality of debits and credits in the journalizing and posting process. · Analyze and use the financial results—horizontal and vertical analyses.. Chapter 4 · Describe the basic characteristics of the cash basis and the accrual basis of accounting. · Identify the reasons why adjusting entries must be made. · Identify the classes and types of adjusting entries. · Prepare adjusting entries. · Determine the effects of failing to prepare adjusting entries. · Analyze and use the financial results and trend percentages. Reading and Resources Our reading for Week 2 includes Chapter(s) 3 and 4 of the textbook.  Pay particular attention to the sections titled "Key Terms" throughout the reading.  They provide a great way for us to see how what we are learning can be applied in the workplace.  The "Understanding the Learning Objectives" section found at the end of the chapters are also a great way to be sure you understand what you have covered and can apply it to solve problems.    Accounting Principles: A Business Perspective, Financial Accounting (Chapters 1-8) James Don Edwards, Roger H. Hermanson, and Bill Buxton a