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You are visiting with a friend, Kimmy, who wants to start a new business. During...

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Accounting

You are visiting with a friend, Kimmy, who wants to start a new business. During discussions on forming the business, Jim makes this statement:

Our business will have accounts receivable and accounts payable. It will also acquire a substantial amount of computers and equipment. Will it be acceptable to use the cash basis as opposed to the accrual basis of accounting?

Prepare a response in a memorandum to Kimmy

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