By Leanna Kelly While every public company uses accrual basis accounting in its financial reporting, it’s not the only bookkeeping standard out there. Cash basis accounting also has practical applications in business. Cash basis accounting is a method where income and expenses are recorded only with the payment of cash to or from the business. Though not the best method for accurate records, it’s a simple practice suitable for small businesses with mainly cash transactions.
Cash basis accounting provides a neat and tidy real-time picture of a business’ cash-on-hand. There are no accounts payable or receivable to worry about, and the books only reflect …read more
