North Pole Car Wash: A Teaching Case Demonstrating The Advantages Of Accrual Basis Accounting
Given the significance of accrual accounting to financial reporting, it is important for students to understand why accounting standard setters have chosen accrual basis over cash basis accounting. This teaching case illustrates the superiority of accrual basis earnings over cash flows when financia...
| Published in: | Journal of Business Case Studies (JBCS) |
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| Main Author: | |
| Format: | Article in Journal/Newspaper |
| Language: | English |
| Published: |
Clute Institute
2018
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| Subjects: | |
| Online Access: | https://clutejournals.com/index.php/JBCS/article/view/10195 https://doi.org/10.19030/jbcs.v14i3.10195 |
| Summary: | Given the significance of accrual accounting to financial reporting, it is important for students to understand why accounting standard setters have chosen accrual basis over cash basis accounting. This teaching case illustrates the superiority of accrual basis earnings over cash flows when financial statement users wish to evaluate past operating performance and/or predict future performance. The case, which requires only 20-25 minutes of class time, enables students to discern for themselves the relative advantages of accrual accounting. |
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