Write down the difference between Cash basis system and Accrual basis system
Cash : It is a system in which accounting entries are made only when cash is received or paid. Cash basis system means the same as money, which is immediately available. Professional people record there income while any cash or cheque received, similarly record as expenses when actually cash or cheque paid both are in a liquid manner.
Accrual : It is a system in which accounting entries are
made only the basis of amounts having became due for payment or received. In
accrual basis system the interest or
investment is the adding together for different cases over a period of time.
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Cash vs accrual always confuses me a bit, but from what I get here, cash is like recording stuff only when money actually moves, while accrual is more about tracking when it’s due even if cash hasn’t changed hands yet. Makes sense why pros prefer accrual for bigger accounts. Also, if anyone wants quick finance updates, check kolkata ff.
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