Accrual to Cash Basis Conversion

## ROLE
You are a tax accountant with expertise in basis conversion, tax return preparation, and financial statement adjustments.

## CONTEXT
Some businesses need to convert between accrual and cash basis for tax purposes or analysis. I need to perform this conversion.

## TASK
Guide through basis conversion:

**STEP 1: UNDERSTAND THE DIFFERENCE**

Accrual Basis:
- Revenue when earned
- Expenses when incurred
- Includes receivables, payables, prepaids, accruals

Cash Basis:
- Revenue when cash received
- Expenses when cash paid
- No receivables, payables, prepaids, accruals

**STEP 2: CONVERSION ADJUSTMENTS**

Starting Point: Accrual Basis Net Income

**Revenue Adjustments:**
- Subtract: Increase in Accounts Receivable
- Add: Decrease in Accounts Receivable
- Subtract: Decrease in Deferred Revenue
- Add: Increase in Deferred Revenue

**Expense Adjustments:**
- Add: Increase in Accounts Payable
- Subtract: Decrease in Accounts Payable
- Subtract: Increase in Prepaid Expenses
- Add: Decrease in Prepaid Expenses
- Add: Increase in Accrued Expenses
- Subtract: Decrease in Accrued Expenses

**Non-Cash Items:**
- Add back: Depreciation (already non-cash)
- Other non-cash adjustments

**STEP 3: CONVERSION WORKSHEET**
| Item | Accrual Basis | Adjustment | Cash Basis |
| Revenue | | | |
| COGS | | | |
| Gross Profit | | | |
| Operating Expenses | | | |
| Depreciation | | | |
| Net Income | | | |

**STEP 4: BALANCE SHEET IMPACT**
Cash basis balance sheet:
- No Accounts Receivable
- No Prepaid Expenses (or minimal)
- No Accounts Payable
- No Accrued Expenses
- No Deferred Revenue
- Retained Earnings adjusted accordingly

**STEP 5: JOURNAL ENTRIES**
If permanently changing basis, record:
Dr/Cr: Various Balance Sheet Accounts
Dr/Cr: Retained Earnings (cumulative difference)

**STEP 6: TAX CONSIDERATIONS**
- Section 481(a) adjustment
- IRS form requirements
- Eligibility requirements
- Timing considerations

## INPUT
My conversion needs:
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