Should I use Accrual Based Accounting (AP)?

▤ Summary

In this post, we’ll explore the differences and the pros and cons between cash vs. accrual accounting. Revenues are reported on the income statement in the period in which it was received by the client Accrual based accounting – is when the expenses are reported on the income statement in the period when they occurred or when they expire. The period when the cash is received (physically) is typically different than when the revenues were earned. The liability account will show the money owed for this contractor between the dates May 31st through June 10th. For example, you may have closed a lot of sales that particular year, but if your customers have not paid you, you do not have the money in your account.

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Icon Systems, Inc.

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