Response to the following problem:
Suppose you work summers mowing lawns. Most of your customers pay you immediately after you cut their grass. A few ask you to send them a bill at the end of each month. It is now June 30 and you have collected $900 from cash-paying customers. Your remaining customers owe you $300. How much service revenue would you have under the
(a) cash basis and
(b) accrual basis?
Which method of accounting provides more information about your lawn-service business? Explain your answer.