Accrual basis and Cash basis Accounting



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Accrual basis and Cash basis Accounting

Introduction

For most of the companies, the goal is to make profit and earn money. However, using different accounting systems to record transactions may meet different results in the end of a period. There is a statement that the accounting profit is equal to the incomes earned in the period minus the expenses happened in the period. There are two accounting systems to record the transaction of a company, which are cash basis accounting and accrual basis accounting. In this essay, I will talk about the differences between the two accounting ...