What difference between both accounting methods of timing

Reference no: EM132448615

Question 1: When we talk about cash accounting and accrual accounting we must understand that the only difference between both the accounting methods is of timing. Cash basis of accounting says that the sale and purchase must only be recorded when cash is actually paid whereas the accrual accounting says that a sale or purchase must be recorded as soon as it takes place. Accrual accounting is usually used in the organization where all the dealing is done on credit basis. The only difference between the methods is timing; when is the sale recorded? Also, if sold on credit, when do we expect to see money?

Reference no: EM132448615

Questions Cloud

Is the DRD a temporary or permanent difference : Tax law allows corporations to take a deduction for a part of dividends received from other corporations. Is the DRD a temporary or permanent difference

How does EVA differ from residual income : How does EVA differ from residual income?

Write a statement positioning brand around the new services : Identify and analyze at least two areas for the improvement or creation of new services. Why do you suggest these areas for improvement or creation of service

Make journal entry related to Concord depreciable assets : Depreciation prior to 2017 under double-declining-balance was $95,400, Make the 2017 journal entry related to Concord's depreciable assets (Equipment)

What difference between both accounting methods of timing : The only difference between the methods is timing; when is the sale recorded? Also, if sold on credit, when do we expect to see money?

How Ivanhoe journal entry to record the change : Percentage-of-completion $117,300, and completed-contract $77,700. The tax rate is 35%. How Ivanhoe's 2017 journal entry to record the change in accounting

Analyze the key element of buying commercial airline service : Analyze the key element of buying commercial airline service.Commercial airlines are part of the service industry. For them, it is critical to make the best

Make general journal entries that should be made at December : Make the general journal entries that should be made at December 31, 2018, to record these events? (Ignore tax effects.)

What is the best estimate of the current stock price : What best estimate of stock dividend growth rate expected to be constant at 1.5% for 2 years, after which dividends expected to grow at a rate of 8.0% forever.

User Account

All Pages