Answer to Question #232795 in Accounting for Another you

Question

A. Answer the questions below.

1. What is the importance of preparing your family's income statement?
2. Explain the accrual concept of revenue and expense recognition.

Answer 1

1.It helps to determine our family's financial health and the financial progress it made during a particular period.

2.Accrual accounting is a technique of accounting in which revenue and expenses are recorded at the time of the transaction rather than when payment is received or paid. Revenues and expenses should be recognized in the same period, according to the matching principle.