MANAGEMENT

Detailed explanation-1: -Under this method, revenue is reported on the income statement only when cash is received. Expenses are recorded only when cash is paid out. The cash method is typically used by small businesses and for personal finances.

Detailed explanation-2: -What is an income statement? Also known as the profit and loss (P&L) statement, the income statement summarizes the financial performance of a business during a specific period, reporting revenues, cost of goods sold, overheads, and the net profit attributable to shareholders.

Detailed explanation-3: -Income Statement (Profit and Loss Statement) The income statement (also called the profit-and-loss statement) summarizes the totally revenues and expenses incurred by a business and shows the profitability (net income or net loss) during a specified period of time.

Detailed explanation-4: -Cash accounting is an accounting method that is relatively simple and is commonly used by small businesses. In cash accounting, transactions are only recorded when cash is spent or received. In cash accounting, a sale is recorded when the payment is received and an expense is recorded only when a bill is paid.