What is accrual accounting, what is cash basis, and what are the main differences between the two

The accrual basis of accounting means that the income and expenses incurred in the current period are recognized in the current period, regardless of whether they are received or paid in cash. The cash basis is:

Regardless of the income or expenses of the current period, as long as they are received or paid in the current period, they are recognized as income or expenses for the current period. Example: Rent income received for the second half of the month 6000 According to the accrual basis, the revenue is recognized in the current month:

1,000 yuan Revenue recognized on a cash basis: 6,000 yuan.

1. The concept is different: the accrual basis is relative to the cash basis.

Accrual accounting is a method of determining the income and expenses of the current period based on whether the income and expenses are attributable to the current period.

The cash basis is a method of determining the income and expenses of the current period based on whether the income and expenses are actually received or paid in the current period.

2. The disadvantages are different:

The advantages of accrual accounting are that it is scientific, reasonable, and the calculation of profit and loss is relatively accurate, but the disadvantages are more complex;

The advantage of the cash payment system is that the processing procedures are simple, but the disadvantage is that it is unscientific and the calculation of profit and loss is not accurate.

3. The scope of use is different

According to China's "Accounting Standards for Business Enterprises", China's enterprises all adopt the accrual system, but China's administrative units still generally use the cash system.

With the reform and improvement of the accounting system of administrative institutions, the cash system will inevitably be replaced by the accrual system.

Receipts and payments must be based on the amount received.

1.The concept is different: Accrual accounting is relative to cash basis. The accrual basis of accounting is based on whether the income and expenses are attributable to the principal.

2.The disadvantages are different: The advantages of accrual accounting are scientific and reasonable3The scope of use is different.

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1. The concept is different

The cash basis is also known as the "cash basis" or "pay-as-you-go basis". It is the symmetry of "accrual accounting". In accounting, it is a method of determining the income and expenses of the current period based on whether the payment has been received or paid as the calculation standard.

The accrual basis is also known as the "receivables and payables". It is a system for dealing with economic transactions based on whether the expenses and income incurred in the current accounting period should be included in the profit or loss of the current period.

2. The calculated income and expense amounts are not exactly the same.

The accrual basis recognizes current income and current expenses on the basis that income has been realized and expenses have been incurred, and should be borne by the current period.

The cash basis is based on whether the income and expenses are actually received or paid in the current period as the criterion of whether the income and expenses are actually received or paid in the current period.

3. The treatment method at the end of the accounting period is different.

The accrual basis of accounting means that income and expenses for the current period are recorded on a "receivable and payable" basis, regardless of whether the amount is actually received or expended.

The cash basis is based on the principle of "actual receipts and payments", and the receipt and payment of actual cash are the measurement criteria.

4. The principles when dealing with income and expenses are different.

On the cash basis, expenses actually incurred in cash in the current period should be treated as accrued expenses in the current period, regardless of whether they should be compensated in the current income.

Any cash income actually received in the current period, whether or not it belongs to the current period, shall be treated as income accrued in the current period; Conversely, income not received in cash in the current period and expenses not paid in cash are not treated as income and expenses for the current period, even if they are attributable to the current period.

Accrual accounting, where expenses incurred in the current period that should be compensated from the income of the current period, whether or not actually paid or unpaid monetary funds in the current period.

shall be treated as expenses for the current period: All income attributable to the current period incurred in the current period, regardless of whether monetary funds actually received or not received in the current period, shall be treated as income for the current period.

1) Accrual accounting, also known as accrual, is an accounting basis for handling economic operations and determining current income and expenses based on the receivables and payables of funds; The cash payment system, also known as the cash receipt and payment basis or the actual payment system, is an accounting treatment basis that uses the actual receipt and payment of funds as the standard to deal with economic business and determine the income and expenses of the current period.

2) On the basis of accrual accounting, all income and expenses belonging to the current period, regardless of whether the payment is actually received or paid, should be treated as income and expenses of the current period; Income and expenses that are not part of the current period shall not be treated as income and expenses for the current period, even if the money has actually been received or paid. The accrual basis is mainly to determine the basis of accounting recognition from the time selection, and its core is to recognize the income, expenses and profit and loss of the current period according to the actual occurrence and impact of the relationship between rights and responsibilities.

On the basis of the accounting treatment of cash receipts and payments, the expenses of income and expenditure received in the current period, regardless of whether they belong to the accounting period or not, shall be treated as income and expenses of the current period; Income and expenses not received in the current period shall not be treated as income and expenses in the current period, even if they are attributable to the current period. The basis of accounting on the cash basis is that when the income and expenses are recognized in the attribution period, some amounts that should be included in current income or expenses are not included in current income or expenses, and some amounts that should not be included in current income or expenses are included in current income or expenses. Therefore, on the basis of the accounting treatment of the cash receipt and payment system, the accounting treatment is not reasonable, and the profit and loss of each accounting period cannot be accurately calculated and determined.

Receipts and payments must be based on the amount received.

1.The concept is different: Accrual accounting is relative to cash basis. The accrual basis of accounting is based on whether the income and expenses are attributable to the principal.

2.The disadvantages are different: The advantages of accrual accounting are scientific and reasonable3The scope of use is different.

Ask a good question, thank you.

Summary. The concept is different: the cash basis is to treat economic business based on the actual receipt and payment of funds, determine the income and expenses of the current period, and calculate the profit and loss of the current period.

The accrual basis is also known as the "receivables and payables". It is based on whether the expenses and income incurred in the current accounting period should be included in profit or loss for the current period. The objects of use are different:

China's enterprises adopt the accrual system, and the administrative units adopt the cash system. The treatment at the end of the accounting period is different. The criteria for recognizing revenue and expenses are different.

The advantages and disadvantages are different.

The concept is different: the cash basis is to treat economic business based on the actual receipt and payment of funds, determine the income and expenses of the current period, and calculate the profit and loss of the current period. The accrual basis is also known as the "receivables and payables".

It is based on whether the expenses and income incurred in the current accounting period should be included in profit or loss for the current period. The objects of use are different: Chinese enterprises adopt the accrual system, and the line guessing and government units adopt the cash system.

The treatment at the end of the accounting period is different. The criteria for recognizing revenue and friendship fees are different. The advantages and disadvantages are different.

The advantage of accrual accounting is that it is scientific, reasonable, and the calculation of profit and loss is more accurate, but the disadvantage is more complicated. The advantage of the cash system is that it is easy to operate, but the disadvantage is that the calculation of profit and loss is inaccurate.

The expanded data cash basis is to determine the basis of accounting for income and expenditure for the current period based on the actual receipt and payment of cash. In China, ** accounting consists of budget accounting and financial accounting. Among them, the budget accounting adopts the cash payment system, and if there are other provisions, follow its provisions; Financial accounting is based on the accrual basis.

The accrual basis and the cash basis are the two accounting bases of the relative spine, and there are certain differences in the accounting treatment results. When the time of occurrence of the transaction or event is inconsistent with the time of recovery of the relevant payment, the profit difference recognized under the two accounting bases is generated. The premise of accrual accounting is accounting periodization and going concern.

Accrual accounting refers to the accounting basis for determining income and expenses for the current period based on the acquisition of the right to receive payments or the obligation to pay them. In practice, the time of occurrence of an enterprise transaction or event is sometimes not exactly the same as the time of receipt and payment of the relevant payment. For example, the current payment has been received, but the sale has not been realized and cannot be recognized as revenue for the current period; or the payment has been paid, but it is not related to the production and business activities of the current period and cannot be recognized as the expense of the current period.

In order to truly and fairly reflect the financial position and operating results, enterprises should carry out accounting recognition, measurement and reporting on the basis of accrual accounting. (1) All the income realized in the current period and the expenses that have been incurred or should be borne shall be included in the income statement as the income and expenses of the current period, regardless of whether the payment is received or paid. (2) Income and expenses that do not belong to the current period, even if the money has been received and paid in the current period, shall not be regarded as income and expenses for the current period.