You have started a sole-proprietorship business. It is a department store selling groceries. You receive payment for the sales made either through a credit card or cash. You pay your suppliers on a credit basis of 30 days. To efficiently manage accounts for your sales and purchases, will you prefer the Accrual basis accounting or the Cash basis accounting? Discuss.
This is what I came up with, please let me know if I'm on the right track: I would use the cash basis accounting because it is a sole propietorship business which would most likely be a small business. The accrual basis of accounting is used mostly for large businesses or corporations.