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Topic: P & L - Cash Basis (

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sachi
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Joined: 04 Jan 2010
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Posted: 04 Jan 2010 at 15:57 \| IP Logged

Here are the details:

Net Income accrual: $236,513.47

Net Income cash basis: $40,765.00

Cash in Bank account: $267,082.43

What are the reasons for the difference in net income for cash basis - P & L and actual cash in hand?

nate
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Joined: 21 Aug 2009
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Posts: 26

Posted: 04 Jan 2010 at 16:44 \| IP Logged

Do you know the difference between accrual and cash basis accounting. There could be multiple reasons for the difference - inventory, accounts receivable, accounts payable, etc... Cash basis = expenses and income recognized when spent and received. Accrual basis = income and expenses recognized when incurred and earned(matching income with expenses).

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