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If you had two companies and one of the companies uses the cash basis of accounting, how would that differ from the accrual basis?

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Solution Summary

This solution discusses how a cash basis accounting differs from an accrual basis of accounting.

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The main difference in cash basis vs. accrual basis accounting is the treatment of revenue and expenses. When a company uses cash basis accounting, all income is recognized when the cash is received. If a customer walks into the business and pays $500 in cash for the service rendered or for the product on November 10th, the cash is recognized as income on that ...

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