In about 80% of all cases you will more than likely use the cash basis method of accounting to get caught up. You would only use the accrual method in this situation if it was imperative to know the ending balance, each month, of accounts receivable and accounts payable. Most small to medium sized businesses […]
Read MoreYes, like I mentioned before there are always exceptions to the rule. The IRS allows all businesses on the cash basis method to write off certain expenses that were not actually paid for in cash by the end of the year. If you are paying payroll to your employees in your business you might have […]
Read MoreThe main differences are in the way both methods or accounting recognize income and expenses. With the cash basis method we recognize and record income when we receive it from the customer. Likewise, we recognize an expense when that expense is actually paid with cash, check or credit card. Like everything else in life there […]
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