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    Accounting Methods

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    apawan jordan
    Accrual accounting and cash accounting are the two primary accounting methods. Cash accounting reports revenues and expenses when cash is received or paid, while accrual accounting reports revenues when earned through sales and expenses when incurred through purchases, regardless of the timing of associated cash flows. Accrual accounting is more commonly used method as it provides a more accurate picture of a company's financial performance over a period by recognizing revenues and expenses in the accounting period in which they occur.

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    Accounting Methods

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    apawan jordan
    169 views1 page
    Accrual accounting and cash accounting are the two primary accounting methods. Cash accounting reports revenues and expenses when cash is received or paid, while accrual accounting reports revenues when earned through sales and expenses when incurred through purchases, regardless of the timing of associated cash flows. Accrual accounting is more commonly used method as it provides a more accurate picture of a company's financial performance over a period by recognizing revenues and expenses in the accounting period in which they occur.

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    Description for Accounting Methods

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    Accrual accounting and cash accounting are the two primary accounting methods. Cash accounting reports revenues and expenses when cash is received or paid, while accrual accounting reports revenues when earned through sales and expenses when incurred through purchases, regardless of the timing of associated cash flows. Accrual accounting is more commonly used method as it provides a more accurate picture of a company's financial performance over a period by recognizing revenues and expenses in the accounting period in which they occur.

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    Accounting Methods

    Uploaded by

    apawan jordan
    Accrual accounting and cash accounting are the two primary accounting methods. Cash accounting reports revenues and expenses when cash is received or paid, while accrual accounting reports revenues when earned through sales and expenses when incurred through purchases, regardless of the timing of associated cash flows. Accrual accounting is more commonly used method as it provides a more accurate picture of a company's financial performance over a period by recognizing revenues and expenses in the accounting period in which they occur.

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    ACCOUNTING METHODS

    What Is an Accounting Method?


    An accounting method refers to the rules a company follows in reporting revenues and
    expenses.

    Primary Methods of Accounting.

    The two primary methods of accounting are accrual accounting and cash accounting.

    Cash Accounting reports revenues and expenses as they are received and paid through cash
    inflows and outflows; commonly used by small businesses.

    Accrual accounting reports revenues as they are earned and incurred through sales and
    purchases on credit and by using accounts receivable & accounts payable. Under the accrual
    method, transactions are recorded when they are incurred rather than awaiting payment. For
    example, a purchase order is recorded as revenue even though the funds are not received
    immediately. The same goes for expenses in that they are recorded even though no payment
    has been made.

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