Your friend is getting ready to start a new business, and she wants to know whether she should use the cash or accrual basis. She is aware that you have had some accounting in college, and she asks you what you think is best and why. In what situations would a start-up company use the cash method, and when would they use the accrual method? In your opinion, which method would allow for more fraud, and what kinds of misstatements might you find? Which method do you feel is the better method? Why?