Method used to determine when revenues and expenses (with associated assets and liabilities) are recognized in the accounts of a firm, and reported in its financial statements. In accrual basis accounting, for example, revenues are recognized when earned and expenses are recognized when incurred, whether or not any cash is received or paid. In cash basis accounting, however, revenues and expenses are recognized only when cash is received or paid, irrespective of the timing of actual sales or purchases.
- The Price of Bad Financial Decisions for Small Businesses
- Outsourcing Your Business
- Guide to Developing Your First Corporate Governance Policies
- Should a Small Business Owner Take Accounting Courses?
- Selecting Accounting Software for Your Small Business
- Accounting Practices Needed When Starting a Business