In cash accounting transactions are recorded when there is an outflow or inflow

In cash accounting transactions are recorded when

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complexity makes it more expensive to implement. In cash accounting transactions are recorded when there is an outflow or inflow of cash (Accounting Tools ,2016). Cash accounting is one of two forms of accounting. Cash accounting is simple and straightforward. Transactions are recorded only when money goes in or out of an account. Cash accounting doesn't work as well for larger companies or companies with a large inventory because it can obscure the true financial position.
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[SHORTENED TITLE UP TO 50 CHARACTERS] 3 ACCRUAL ACCOUNTING Accrual accounting aligns itself with the generally accepted accounting principles, and the international financial reporting standards frameworks. This method is required by the major accounting frameworks because the results are a more accurate representation of the results and positions of an organization (S, 2015). If an owner of an organization wants the business financial statements to be audited, then their transactions must be recorded in accrual method or an auditor will not provide an opinion. Accrual accounting is the standard accounting practice for most companies, with the exception of very small businesses and individuals accrual accounting, firms have immediate feedback on their expected cash inflows and outflows, which makes it easier for businesses to better manage their current resources and plan effectively for the future.
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