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    Accrual vs cash basis for tax returns: compare, when use each?

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    Compare and contrast cash versus accrual accounting for the preparation of a tax return? Why would you use one over the other?

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    Solution Preview

    Cash basis reports receipts and payments in the month that the cash went into or left your bank account. This is clean and crisp - either you got or paid the funds or you didn't. No guessing. No counting. Simple. It also ensures that you have cash to pay taxes!

    Accrual ...

    Solution Summary

    Your discussion is 180 words and compares the two methods and indicates when each may be used.