What is the difference between cash and accrual accounting? What is the debit and credit for...
What is the difference between cash and accrual accounting?
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What is the debit and credit for each of the following items?
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Issue $10,000 equity
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Buy $1,000 of inventory
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Borrow $15,000 from bank
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Homework Answers
| Difference between cash and accrual accounting | ||||||||
| Cash accounting follows a concept of cash in and out means the expenses will be recognized when it s paid and revenue will be recognized when the amount is received whereas accrual accounting follows a concept where revenue is recognized when it is accrued irrespective of when it is received and expense will be recognized when it is accrued irrespective of when it is paid. | ||||||||
| General Journal | Debit ($) | Credit ($) | ||||||
| Cash | 10,000 | |||||||
| Equity | 10,000 | |||||||
| Inventory | 1,000 | |||||||
| Cash | 1,000 | |||||||
| Cash | 15,000 | |||||||
| Loan | 15,000 | |||||||
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