In this fast pace and continuingly developing economy understanding accounting is necessary to keep

proper accountability of organizations business activities, and is a vital tool used to make decisions in
the management of organizations; accounting is also used to tailor to the needs of external users like
consumers, suppliers ect. The technology used to process accounting data is simply a tool used to keep
accurate records and lower human error. Without proper understanding of the information being
processed in the system the technology is useless.

Question 2

In accrual basis accounting, income is reported in the fiscal period it is earned, regardless of when it is
received, and expenses are deducted in the fiscal period they are incurred, whether they are paid or not.
In other words, using accrual basis accounting, you record both revenues and expenses when they
occur.

The difference between the two types of accounting is when revenues and expenses are recorded. In
cash basis accounting, revenues are recorded when cash is actually received and expenses are recorded
when they are actually paid (no matter when they were actually invoiced).