Shelly is the office man for XYZ medical practice. InDecember, XYZ enters into an agreement with a local supply companyto provide office supplies on a monthly basis. The terms of thesupply agreement indicate that XYZ will pay the supply company $200every month upon delivery of the supplies, beginning in January.The supply company ships the supplies in December. Shelly mustdetermine which accounting method (cash basis or accrualaccounting) is best for XYZ.
respond to the following prompts .
1, How would these transactions be recorded using thecash method?
2,How would these transactions be recorded using theaccrual method?
3, Based on your determination of how thesetransactions would be recorded using each of the two methods, whichmethod do you think Shelly should use and why?
