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Cash Basis of Accounting:

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ayokenny2001 ayokenny2001 · Answer 1 · 2022-07-20T17:23:20+02:00

Cash basis of accounting is the one that recognizes when cash has been paid and received unlike accrual basis.

Cash basis of accounting is the one that recognizes when revenue when received unlike accrual basis.

It is important to know that cash basis of accounting ensures the company always knows how much cash flow it has.

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anthougo anthougo · Answer 2 · 2022-07-23T11:34:40+02:00

Cash basis accounting is an accounting method that records revenues and expenses when cash is received or paid.

The cash basis accounting method recognizes revenue and expenses when cash exchanges hands.

On the other hand, the accrual basis recognizes revenue and expenses when performance obligations arise.

Thus, cash basis accounting is a method that recognizes revenue and expenses immediately after cash is received.

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