BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Cash basis accounting is a method where revenue is recorded when the cash is actually received; likewise, expenses are recorded when they are paid. Cash accounting does not acknowledge or track accounts receivable or accounts payable. For that reason, the method is best for small businesses that do not stock inventory.

Detailed explanation-2: -Under the cash method of accounting, transactions are recorded when cash is received or paid. In other words, revenue is recorded when cash payment is received for the sale of products or services, and expenses are recorded when cash is paid to vendors for purchases of products or services.

Detailed explanation-3: -Cash accounting is an accounting method that records income when it’s received and expenses when they’re paid instead of when they were incurred. Small businesses typically use the cash accounting method. Learn how cash accounting works, what types of businesses can use it, and its pros and cons.

Detailed explanation-4: -Under cash basis accounting, revenue and expenses are recorded when cash is actually paid or received. Under accrual basis accounting, revenue is recorded when it is earned and expenses are reported when they are incurred.

Detailed explanation-5: -Businesses that use cash basis accounting recognize income and expenses only when money changes hands. They don’t count sent invoices as income, or bills as expenses – until they’ve been settled.