What is the difference between cash basis and accrual basis Balance Sheet?

karen_p_montilla
Profile Answers by karen_p_montilla Questions by karen_p_montilla
Mar 30th, 2009
7
8393

Editorial / Best Answer

VISWANATHA

Profile Answers by VISWANATHA Questions by VISWANATHA

Member Since May-2009 | May 2nd, 2009

Under cash system of accounting, transactions are recorded in books on the basis of their actual payment or receipt made.
Under the accrual basis of accounting, the transaction are record on their occurrence in the business regardless of actual payment or receipt is made, and recognizes the assets and liabilities accordingly. provisions are made for all known losses and obligations are recorded for the period to which it relates to in the books.

Showing Answers 1 - 7 of 7 Answers

VISWANATHA
Profile Answers by VISWANATHA

May 2nd, 2009

Under cash system of accounting, transactions are recorded in books on the basis of their actual payment or receipt made.
Under the accrual basis of accounting, the transaction are record on their occurrence in the business regardless of actual payment or receipt is made, and recognizes the assets and liabilities accordingly. provisions are made for all known losses and obligations are recorded for the period to which it relates to in the books.

SAMISR KUMAR

Jul 12th, 2011

In the cash basis account transaction are recorded only cash in flow or outflow (cash paid or received ). but in the accrual basis we consider as a actual paid or received in this case we consider rent due,outstanding rent, outstanding salary, prepaid rent, etc considered.

Sowmya

Oct 29th, 2011

Cash basis transaction is recorded when the cash moves from hand to hand, Ex:Rs.200.00 stationery purchased and paid. Accrual basis means transaction is recorded with out flow of funds from our hand, Ex:Raw material purchased on credit basis, all payables are comes under accrual basis.