sam boyer acc 290 week 3

sam boyer acc 290 week 3 - Running head ACCRUAL AND CASH...

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Running head: ACCRUAL AND CASH ACCOUNTING 1 Accrual and Cash Accounting Samatha Boyer ACC 290 10/16/2014 Karen Evens
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ACCRUAL AND CASH ACCOUNTING 2 Accrual and Cash Accounting There is a different between accrual and cash accounting. An accrual is an expense which is entered into the journal regardless if it had been paid, cash in hand, or not. An example would be if a service was done, the money would still need recorded even if the customer had not paid yet. Accruals require adjusting when entries do not match up. Cash accounting is what small businesses use. The cash method only documents revenue when the money is received or even paid out. (Kimmel, 2011) Most of the time, accountants will use the cash basis accounting when they are running a small business. Small business owners will use the cash basis accounting because they are either
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Unformatted text preview: do not have a strong background in accounting or the small business does not want to deal with a whole lot of journal entries when it comes down to the time they need to close the period. (Vitez) Another reason a book keeper might use cash basis book-keeping without disobeying generally accepted accounting would be by documenting all sales and cash received. Also, as long as anything which is being paid is documented, then there will not be any violations. (Vitez) ACCRUAL AND CASH ACCOUNTING 3 References Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2011). Financial accounting: Tools for business decision making (6th ed.). Hoboken, NJ: John Wiley & Sons. Vitez, O. (n.d.). Accounting Accrual Vs. Cash Basis. Retrieved from ...
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