The major difference between cash-basis accounting and accrual-basis accounting lies in when the firm reports revenue and expenses.

Question

Quizplus · Accepted Answer

In cash-basis accounting, revenue and expenses are recognized only when money is received or paid out, while in accrual-basis accounting, revenue and expenses are recognized when they are earned or incurred regardless of the timing of the actual cash flow.

The Major Difference Between Cash-Basis Accounting and Accrual-Basis Accounting Lies