Scribd Logo
Upload

Welcome to Scribd!

  • A Principle

    Uploaded by

    khadar Abdi Buux
    7 views1 page
    The document discusses the differences between accrual and cash basis accounting. Accrual basis accounting records revenue and expenses when transactions occur regardless of when cash is received or paid out, while cash basis accounting only records revenue and expenses when cash is actually received or paid out. It also notes that accrual accounting involves deferrals where expenses can be prepaid and assets recorded before being used, and revenues can be unearned and recorded as liabilities before being earned. Accruals refer to revenues being accrued before receipt and expenses being accrued before payment.

    Original Description:

    Original Title

    A.principle

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses the differences between accrual and cash basis accounting. Accrual basis accounting records revenue and expenses when transactions occur regardless of when cash is received or paid out, while cash basis accounting only records revenue and expenses when cash is actually received or paid out. It also notes that accrual accounting involves deferrals where expenses can be prepaid and assets recorded before being used, and revenues can be unearned and recorded as liabilities before being earned. Accruals refer to revenues being accrued before receipt and expenses being accrued before payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    7 views1 page

    A Principle

    Uploaded by

    khadar Abdi Buux
    The document discusses the differences between accrual and cash basis accounting. Accrual basis accounting records revenue and expenses when transactions occur regardless of when cash is received or paid out, while cash basis accounting only records revenue and expenses when cash is actually received or paid out. It also notes that accrual accounting involves deferrals where expenses can be prepaid and assets recorded before being used, and revenues can be unearned and recorded as liabilities before being earned. Accruals refer to revenues being accrued before receipt and expenses being accrued before payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Accrual and Cash basis

     Accrual basis accounting records revenue and expenses when transactions occur but
    before money is received or dispensed.
     Cash basis accounting records revenue and expenses when cash related to those
    transactions actually is received or dispensed.

    Deferrals (Delay)
    1. Prepaid expenses: Expenses paid in cash and recorded as assets before they are used or
    consumed.
    2. Unearned revenues: Cash received and recorded as liabilities before revenue is earned.
    Accruals:
    1. Accrued revenues: Revenues earned but not yet received in cash or recorded.
    2. Accrued expenses: Expenses incurred but not yet paid in cash or recorded.

    You might also like