Cash Basis and Accrual Basis Accounting | Difference between Cash Basis and Accrual Basis Accounting

🔴 ACCRUAL BASIS -
Under accrual accounting, revenue is accounted for when it is earned. Unlike the cash method, the accrual method records revenue when a product or service is delivered to a customer with the expectation that money will be paid in the future. In other words, money is accounted for before it’s received. Likewise, expenses for goods and services are recorded before any cash is paid out for them.
🔴 CASH BASIS-
Under cash basis accounting, 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.

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🔴 In this video - #padhakulog
Teacher's Name - CS Payal Popli
Topic - Difference between Cash Basis and Accrual Basis

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