Whoa in this presentation we will be discussing a cash method versus an accrual method objectives. We will be able to at the end of this, define and explain a cash method, define and explain an accrual method and explain the difference between the cash and accrual methods. When considering the cash method and the accrual method, they’re not necessarily completely different or diametrically opposed. But when presented, they are often presented in this format partially because in order to explain one, it’s often useful to know the other it’s useful to be able to compare the differences between the two methods.
Posts with the Accrual Method tag
Cash vs Accrual – Cash Method / Accrual method differenc
Cash method & accrual method explained, the most common accounting methods, cash method recognizing revenue when cash is received and expenses when cash is paid, accrual method recognizing revenue when cash is earned and expenses are consumed or used to help generate revenue. Accrual method tries to find the specific point in time when revenue was earned, while the cash method uses the receipt of cash as being close enough the point in time that revenue was earned. Recognizing revenue when earned is the accrual concept of revenue recognition. We will have another video on the accrual concept of revenue recognition. The accrual method attempts to pinpoint the point in time that expenses are incurred or used while the cash method uses the spending of cash to be close enough. The accrual concept of recognizing expenses when earned is called the matching principle. We will have another video on the accrual concept of the matching principle.