Discussion Question
"It's Just Lunch" is a nationwide service company that arranges lunch dates for clients. "It's Just Lunch" collects cash up front for a package of dates. Suppose your group is opening an "It's Just Lunch" office in your area. You must make some important decisions-where to locate, how to advertise, and so on-and you must also make some accounting decisions.
Discussion Questions:
• Will the business use the cash basis or the accrual basis of accounting? Give a complete explanation of your reasoning.
• How often will financial statements be prepared? Why? Discuss how the business will use each financial statement.