V3.14.

CashAndAccrualBasis

Cash Basis Accrual Basis

= Income is = Income is
Recognized when Recognized when
RECEIVED regardless EARNED regardless of
of when earned when received.
= Expense is = Expense is
Recognized when PAID Recognized when
regardless of when INCURRED regardless
incurred. of when paid.

ITEM Cash Basis Accrual Basis

Cash Sales Plus Cash Sales Plus
SALES Collection of Sales on Account
Trade Rec
Cash Purchases Cash Purchases
PURCHASE Plus Payments to plus Purchases on
S trade creditors Account.
Items Received Items earned are
Income are considered as considered as
Other than Income Income regardless
SALES regardless of of when Received
when Earned.
Items paid are Items incurred are
Expenses in treated as treated as
General Expense Expenses
regardless of regardless of when
when incurred Paid.
Depreciation Depreciation is Depreciation is
Provided Normally Provided Normally
No bad debts are Doubtful Accounts
Bad Debts recorded because are treated as Bad
Trade Rec are Debts.
Not Recognized

In SOLVING:

For Cash Basis:

if Cash was Asked Always consider if Cash is involved

For Accrual Basis