Can you explain the difference between accrual accounting and cash accounting?”
Thr first and foremost thing that should be controlled by humans is Greed. Us , humans , always like to compete over things bigger houses ,more cars ,more land and so on. The materialistic desires of humans have already driven the Environment into such drastic conditions that reversing them is nextRead more
Thr first and foremost thing that should be controlled by humans is Greed. Us , humans , always like to compete over things bigger houses ,more cars ,more land and so on. The materialistic desires of humans have already driven the Environment into such drastic conditions that reversing them is next to impossible. So the only thing that can be done is to start humbling ourselves down and save resources ,help as many people as you can since being selfish at this point of time will definitely not help. Start interacting more with nature and you’ll definitely have the urge inside to do something about the ongoing environmental crisis. Start from simple things that were taught to us in kindergarten like using dustbins and not dirtying the water bodies as well as trying to revive the barren land to make it cultivable again and planting more trees of course . We should start finding out more biotechnological and agricultural advances to increase the amount of produce to meet the demand and supply in a healthy way instead of using steroids and chemical fertilizers. Also, be aware while buying non biodegradable products and not recycling it ,limit the use of plastic to as much extent as possible . Sewage water treatment plants should be increased to treat sewage water and make it as useful as possible to avoid wastage of water and saline Water available in the oceans and seas should also be desalinated to cater to the supply in case of drought and water scarcity. Evolution in science and technology has definitely helped a lot to control climate change, deforestation and global warming Apart from all this the chemical and nuclear wars over the years have also made a huge contribution so let’s be more kind and spread more love.
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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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