Accrual And Cash Accounting Essay

These are two systems of keeping track of income and expenses in a phone line, (accrual and coin accounting). Accrual and cash accounting difference is in when a sale and purchase are credited and debited to the account. The cash mode is when cash is received, and the expense is when it is paid. An example is when I am contracted to headstone a room, which will be completed within a g anyus of hours, the client pays me. After completing the job my client pays me with cash or check. Therefore, it is considered cash accounting and recorded as so. Cash accounting tracks the cash flow only when does not track revenue. With accrual accounting, all legal proceeding are recorded if cash is received or not. Most companies office accrual accounting on a weekly basis to proctor cash flow to ensure they have enough cash on hand for the business to operate.Accrual accounting transactions are, the day they of service. For an example, with my business there are some jobs that I and will b e completed, but not paid until later. When its a company, their contracts are paid on a monthly basis. For a company these are considered the companies account payable, that arpaid monthly. As for me these are accrual accounts, but arerecorded. The cash and accrual methods can modernise the same, www.inc.com/articles/2000/04/19194 Cash and accrual accounts can have no difference if all transactions are paid in cash when completed no matter what methods are . Accrual accounting shows the income and debts in partial of a business and cash accounting only shows the cash flow. Each method used together will give a more consummate picture of the company business.Referenceswww.inc.com/articles/2000/04/19194.html, Cash vs. Accrual Accounting/Bookkeeping Articleswww.dummies.com, deciding between Cash-Basis and Accrual Accounting-For Dummies