Bookkeeping

Should I use cash or accrual accounting?

Looking into starting my own business and trying to understand the accounting tasks I’ll need to manage. First question is, which method should I use? Is one better than the other?

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Answer

  1. 4 Answers

    The difference between cash and accrual accounting lies in the time of when sales and purchases are recorded in your accounts. The cash would recognize your revenue and expenses only when money changes hands. The accrual accounting would recognize revenue when its earned, and when expenses are billed but not paid.

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