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Accounting Methods

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Running Head: CASH AND ACCRUAL ACCOUNTING MEMO DATE: TO: FROM: SUBJECT: Cash and Accrual Accounting Cash and accrual eventually add up to an equal amount. This accounting techniques differ when it comes to recording finances in a given period. Therefore basically after the customers have completed the payments the financial statements during that period where the payments are completed will reveal how profitable the business was. The cash accounting is done upon receiving payment and payment of expenses accrual accounting is recorded on purchase. Therefore the accrual accounting statements reveal the profit the business would make while the cash accounting statement reveal the current financial status of the company explaining why the business current ratio is unable to cater for the liabilities. The cash accounting on the sales will be the same as the sales on accrual accounting althou ...
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