Question

During its first year of operations, Walnut Company completed the following two transactions. The annual accounting period ends December 31. a. Paid and recorded wages of $ 130,000 during Year 1 ; however, at the end of Year 1 , three days' wages are unpaid and have not yet been recorded because the weekly payroll will not be paid to employees until January 6 of Year 2. Wages for the three days are $ 4,000 . b. Collected rent revenue on December 10 of Year 1 of $ 2,400 for office space that Walnut rented to another company. The rent collected was for 30 days from December 10 of Year 1 to January 10 of Year 2. (d) Explain why the accrual method of accounting provides more useful information to financial analysts than the cash method of accounting.

Answer 1

Accrual accounting practices more accurately replicate the revenues and expenses during a given time period, ultimately permitting companies to achieve more accurate gross, operating, and profit margin analyses.

Accrual of something is, in finance, the adding together of interest or different investments over a period of time. An accounting period, in bookkeeping, is the length with reference to which management accounts and monetary statements are prepared. In management accounting, the accounting period varies widely and is decided via management. monthly accounting periods are common.

An accounting duration is the time frame for which a business prepares its financial statements and reports its financial performance and position to external stakeholders. this could be after three, six, or twelve months. The accounting period usually coincides with the business's fiscal year.

learn more about the fiscal year here https://brainly.in/question/15853978

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