What type of important information is ignored by cash basis accounting?
What type of important information is ignored by cash basis accounting?
Homework Answers
Important information ignored by cash basis accounting :-
- Cash basis accounting ignores the recognition of income at the time when it is earned (like completion of project) instead it recognises income when cash is received.
- Cash basis accounting ignores the recognition of expense when it is billed instead it recognises expense only when cash is paid.
- Also cash basis accounting does not recognise Account payable and Account receivable.
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What type of important information is ignored by cash basis
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