What about accrual accounting and the matching principle is true? More than one answer may be true.

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Brennen

Business

2 February, 13:36

What about accrual accounting and the matching principle is true? More than one answer may be true.

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Peyton Vincent · Answer 1

The main difference between accrual and cash basis accounting lies in the timing of when revenue and expenses are recognized. The cash method is a more immediate recognition of revenue and expenses, while the accrual method focuses on anticipated revenue and expenses.

The Cash Method

Revenue is reported on the income statement only when cash is received. Expenses are only recorded when cash is paid out. The cash method is mostly used by small businesses and for personal finances.