Paper

292 Words2 Pages
CheckPoint Accrual and Cash Accounting Tamela Eskridge University of Phoenix XACC-Principles of Accouning 290 Shair Flowers July 05, 2013 Checkpoint Accrual and Cash Accounting The difference the accrual and cash Accounting is that accrual is a method of financial record-keeping that measures a company’s position which is performance. Accrual accounting basis, are matched to expenses when specific transactions occur. Accrual accounting particular accounting method permits which is called a cash flow. Which that includes incoming and outgoing, cash flows. The companies with that is any size or usually some type of accrual method which is purchases and expenditures, which keeps the bottom line in the term. Cash Accounting is a specific method of accounting used on the balance sheets of businesses. Cash Accounting is considered the method of accounting. Example, an individual might not do a contract, performing a service, and etc. Cash accounting is individual or business which does not record income until actually receives the payment. Which means if a person sells 100 widget, or does 10 hours of work, the money is owed for the widgets and work. When might an accountant use cash basis accounting without violating generally accepted accounting principles? The cash- basis accounting methods records are transactions when cash changes hands. The accounting method provides small business with a simple method of managing financial information. Both ash basis and accrual accounting forms are approved accounting methods for tax purposes. The GAAP requires companies to use the accrual accounting maintaining financial information. The requirements are companies with $5 million dollars in annual sales or $1 million dollars in annual inventory based sales. References 1. http://www.wisegeek.com/what-is-cash-accounting.htm 2.

More about Paper

Open Document