Cash basis and accrual basis
This query is : Resolved
11 August 2012
Dear sir,
1)Cash basis
2)Accrual basis accounting
Please anybody explain with example
Regards
RAMESHA.M
1)Cash basis
2)Accrual basis accounting
Please anybody explain with example
Regards
RAMESHA.M
CA Prashant Gupta
(Expert)
11 August 2012
you need to pay electricity bill of March.
which you paid on 6th April
in cash basis you will entered in 6th April it means next year
but in accrual basis you will booked it on 31st March it means this year.
this is the base difference
which you paid on 6th April
in cash basis you will entered in 6th April it means next year
but in accrual basis you will booked it on 31st March it means this year.
this is the base difference
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11 August 2012
Cash basis means you book all expenses and liabilities as and when you make the payment
Accrual basis means irrespective of any expenses paid or not but which is payable within the accounting year has to be provided. For example the auditor audits for the financial year say 1.4.2011 to 31.3.2012 but he audits after the year is ended say some times in the month of May, 2012 but his fee is due on 31.3.2012 so you have to pass the entry for audit fee as expenses and credit the auditor or audit fee payable as this has accrued on 31.3.2012
Accrual basis means irrespective of any expenses paid or not but which is payable within the accounting year has to be provided. For example the auditor audits for the financial year say 1.4.2011 to 31.3.2012 but he audits after the year is ended say some times in the month of May, 2012 but his fee is due on 31.3.2012 so you have to pass the entry for audit fee as expenses and credit the auditor or audit fee payable as this has accrued on 31.3.2012
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11 August 2012
1.In Cash Basis Accounting, INCOME OR EXPENDITURE IS BOOKED ONLY WHEN, IT IS ACTUALLY RECEIVED OR SPENT.
2. In Accrual Basis of Accounting, ONLY EXPENDITURE IS BOOKED EVEN THOUGH NOT ACTUALLY SPENT. BUT INCOME IS BOOKED ONLY AFTER ACTUAL RECEIPT.
2. In Accrual Basis of Accounting, ONLY EXPENDITURE IS BOOKED EVEN THOUGH NOT ACTUALLY SPENT. BUT INCOME IS BOOKED ONLY AFTER ACTUAL RECEIPT.
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14 August 2012
Help me for finalization of accounts
Dear Sir
I did
1. Sales and purchase entries
2. Tallied vat accounts
3. Bank statement up to 31.3.2012
4. Party confirmation statement i.e. creditors and debtors ledger tallied
5. Checking cash balance positive
6. Provision of vat payable and some items are payable
7. Expenses are like telephone and electricity are shows march month payable (Provisions)
8. Audit fees and accounting charges some expenses are I entered
Please help me next what I missed statutory or any other matters for finishing finalization of accounts this is proprietorship concern
Please specify items what you know
Regards
RAMESHA.M
Dear Sir
I did
1. Sales and purchase entries
2. Tallied vat accounts
3. Bank statement up to 31.3.2012
4. Party confirmation statement i.e. creditors and debtors ledger tallied
5. Checking cash balance positive
6. Provision of vat payable and some items are payable
7. Expenses are like telephone and electricity are shows march month payable (Provisions)
8. Audit fees and accounting charges some expenses are I entered
Please help me next what I missed statutory or any other matters for finishing finalization of accounts this is proprietorship concern
Please specify items what you know
Regards
RAMESHA.M
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