Accounting System
This query is : Resolved
10 March 2009
Dear Sir,
Waht is the difference between Accrual and Mercantile System of accounting, Give one simple example?
Waht is the difference between Accrual and Mercantile System of accounting, Give one simple example?
10 March 2009
Accrual Accounting
It is a system of accounting in which transaction are entered in the books of accounts, when they become due. The transactions are recognised as soon as a right to receive revenue and/or an obligation to pay a liability is created. The expenses are recognised when the resources are consumed and incomes are booked when they are earned. Therefore, the focus is on the recording of flow of resources i.e. labour, goods, services and capital., the related cash flow may take place after some time (of event) or it may or may not take place in the same accounting period.
Accrual and Mercantile system are same. the two main accounting system are :
cash basis and accrual/mercantile system.
It is a system of accounting in which transaction are entered in the books of accounts, when they become due. The transactions are recognised as soon as a right to receive revenue and/or an obligation to pay a liability is created. The expenses are recognised when the resources are consumed and incomes are booked when they are earned. Therefore, the focus is on the recording of flow of resources i.e. labour, goods, services and capital., the related cash flow may take place after some time (of event) or it may or may not take place in the same accounting period.
Accrual and Mercantile system are same. the two main accounting system are :
cash basis and accrual/mercantile system.
11 March 2009
Good answer !!
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