![]() Cash accounting is beneficial for small companies or organisations and for complex organisational structures accrual accounting is better.Ĭash accounting is a system where revenues as well as expenses are realised when they are received or paid out in case of an expense. ![]() For example, income will be recorded when the company receives cash and expenses are recorded when they are actually paid out and not when the bill is raised.ĭescription: There are two basic type of accounting methodologies – one is cash accounting and the other is accrual accounting. Definition: Cash accounting is the methodology under which transactions are recorded when they actually happen.
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