Can you explain the difference between accrual accounting and cash accounting?”
The COVID-19 pandemic has catalyzed significant changes in the Indian healthcare system, addressing both immediate challenges and long-term improvements: Infrastructure Strengthening: There has been a focus on enhancing healthcare infrastructure, including the establishment of COVID-dedicated hospitRead more
The COVID-19 pandemic has catalyzed significant changes in the Indian healthcare system, addressing both immediate challenges and long-term improvements:
- Infrastructure Strengthening: There has been a focus on enhancing healthcare infrastructure, including the establishment of COVID-dedicated hospitals, ICU beds, and oxygen plants. This aims to better handle future healthcare crises.
- Digital Transformation: Telemedicine and digital health platforms saw rapid adoption, facilitating remote consultations and medical services. This shift has improved healthcare accessibility, especially in rural areas.
- Public Health Preparedness: Governments and healthcare bodies are prioritizing pandemic preparedness plans, stockpiling essential medical supplies, and strengthening surveillance systems to detect outbreaks early.
- Healthcare Workforce Support: Recognition and support for healthcare workers have increased, with initiatives for better training, mental health support, and incentives to retain and recruit skilled professionals.
- Policy Reforms: Reforms in healthcare policies are underway to ensure more equitable healthcare access, affordable treatment options, and improved coordination between public and private sectors.
- Community Engagement: Public awareness campaigns on hygiene, vaccination, and disease prevention have been intensified to empower communities in health management.
These changes reflect a proactive approach to healthcare reform post-pandemic, aiming to build a resilient and responsive healthcare system capable of addressing future challenges effectively.
The main difference in accrual based accounting and cash based accounting is in the timing of when revenues and expenses are recognized. In accrual based accounting, revenues and expenses are recorded when they are incurred, and before the cash transaction happens. This method follows the matching cRead more
The main difference in accrual based accounting and cash based accounting is in the timing of when revenues and expenses are recognized.
In accrual based accounting, revenues and expenses are recorded when they are incurred, and before the cash transaction happens. This method follows the matching concept, which ensures that the revenues and their expenses are recorded in the books of accounts in the financial period. Accrual accounting provides an accuracy of a company’s financial position and performance because it involves accounts receivable and accounts payable. For example, if a company delivers goods in December but receives payment in January, the revenue is recorded in December under accrual accounting.
In Cash based accounting, revenues and expenses are recognized only when the cash is actually received or paid. It is simpler and often used by sole proprietorship and individuals because it gives a clear view of cash flow. For example, Under cash accounting, the revenue would be recorded in January when the payment is received, not when the goods were delivered.
Both the methods have their own pros and are chosen to their specific needs and requirements of the business.
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