The accrual accounting system is a standard system used by most businesses and is also the system used in the simulation. In relation to the rules of accrual accounting, consider the following questions:
How does the accrual accounting system impact the financial statements and the standing positions of firms in the simulation such that these may not reflect the true, long-term sustainability of the firms’ strategies?
What is being “unaccounted” for?
What contrasts are there between what is shown in cash flow statements and the need for firms to borrow at high rates and firms’ income statements?
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