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Cash basis versus accrual basis: Chart and discussion

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What are the major differences between cash basis accounting and accrual accounting? Which one uses the basic accounting equation?

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Solution Summary

This solution not only answers the stated question but also presents a table and sample journal entries to show the students how events and the settling of those events in cash are not the same and WHY.

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See the attached file.

This is probably the hardest concepts for financial accounting students to grasp! I have attached a word document that should help you see the difference between cash and revenue and expenses with a chart and several JE examples. Please look at ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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