Q.What's the difference between a cash an accrual accounting system?

A.Most businesses must decide whether to use a cash or accrual method of accounting to record sales and purchases. Generally under the "Cash Method" of accounting, income is recorded when received and expenses are recorded when paid. Under the "Accrual Method", by contrast, both income and expenses are recorded when incurred, whether or not actually received or paid. The only main exception is for credit card sales which are always treated as cash sales for bookkeeping purposes.

© Copyright 1999-2024 Melissa C. Marsh. All Rights Reserved. All Information on this website is subject to a Disclaimer and Use Agreement. This information is provided as general information only and should not be construed as legal advice. We advise you to seek the advice of competent legal counsel to address your own specific questions, facts and circumstances.