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Cash and Accrual Accounting
Learn more about cash and accrual accounting.
Cash and Accrual Accounting
- The accrual system focuses on when a transaction takes place.
- In contrast, the statement of cash flows is concerned with cash receipts and payments, and not the timing of the underlying transaction.
- There can be a significant difference between an entity’s cash position and its profit.
Difference Between Cash and Accrual Accounting
Statement of Profit or Loss
Statement of Cash Flows
The Statement of Cash flows
Reports:
- cash balance at beginning and end of period
- cash inflows and outflows for the period
- net cash for the reporting period.
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