Question

4 difference between accurate basis of accounting and cash basis of accounting

Answer 1

Heya mate ur answer is...

⭐DIFFERENCE BETWEEN ACCRUAL and CASH BASIS of ACCOUNTING⭐

1)In accrual basis of accounting both cash and credit transactions are recorded whereas in cash basis only cash transactions are recorded.

2)In accrual basis accounting requires technical knowledge as many adjustments are to be made whereas in cash basis does not require much technical knowledge.

3)Accrual basis is recognised by The Companies Act ,2013 whereas cash basis is not.

4)Accrual basis is more reliable as it records both cash and credit transactions and reveals correct profit or loss.But cash basis is less reliable as it records only cash transactions and as a result does not reveal correct profit or loss.


✌Hope it helps.