Accrual Method of Accounting

Accrual Method of Accounting - revenue equal cash? No is...

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Accrual Method of Accounting Accrual Accounting is different to a cash basis accounting because its goes and follows events or actions that occur to see and recognize how the money can be brought in and out. This is different compared to cash because cash accounting is only recognized when money is brought in or exchanged, whereas Accrual is recognizing before the exchange of money. Accrual for a nonprofit organization is important because it is based on events first and when you can figure out what works within the community you can really make people happy as well as getting lots of support for whatever it is that you are doing. Does Accrual Accounting
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Unformatted text preview: revenue equal cash? No is the answer. This is because Accrual is based on events and not exchange of cash and that’s what revenue is. A statement of cash flow is important to management and an organization because it shows balance and shows where things need to be improved and what is holding the company’s back. It shows day to day and monthly cash flows and this helps because you can then see for example what months do well and where your business is going, such as is the winter better or summer and then you can try and improve on the season or months that aren’t doing good. Doing so will have your organization more balance and successful....
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This note was uploaded on 08/07/2011 for the course HSM 210 taught by Professor Shellymcdowell during the Spring '11 term at University of Phoenix.

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