Help me study for my Management class. I’m stuck and don’t understand.
Read the posts of your peers and respond to at least one, either by refuting all or part of the position taken or by adding to it. As you did in your initial post, use your research to support your claims and be sure to cite your sources according to APA guidelines.
Student post down below:
The Financial Accounting Standards Board (FASB) was established in 1973 to sets the ground rules for the measurement, reporting, and disclosure of information in financial statements of nongovernmental entities (Weikart, Chen, & Sermier, 2013). To measure, report, and disclose information accurately, an organization must decide which of the two accounting measures they will use. There are two accounting methods: cash and accrual, of which the difference is the timing of the record-keeping (Weikart, Chen, & Sermier, 2013). A non-profit that uses cash accounting counts every transaction when cash is received or spent (Weikart, Chen, & Sermier, 2013). In contrast, accrual accounting records the effect of a transaction whenever it occurs, with or without cash changing hands (Weikart, Chen, & Sermier, 2013).
Tendaji Community Development Corporation is a non-profit focused on promoting models that encourage lasting change in the lives of young people and families by helping them realize their potential for growth in caring relationships and nontraditional learning experiences and community service (Tendaji, n.d.). Cash accounting practices would affect the way revenue is handled at Tendaji. It would not accurately depict the resources that Tendaji has access to because a considerable chunk of Tendaji’s funds comes from non-cash resources. Using an accrual-based accounting system, Tendaji would be better poised to offer a more accurate depiction of its current finances, which would lead to more accurate projections. The type of funds that Tendaji receives is government grants, private donations, and funds from contract agreements for services.