Proprietary concern - Whether Cash Basis or Accrual

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CA Abhishek Jain (Querist)
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19 May 2008 Please guide me whether it is compulsory for proprietary concern to maintain their accounts on Cash basis ?

Thanks,
Abhishek Jain

Shekar

Shekar (Expert)
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19 May 2008 No..u Can follow accrual basis which is more logical...

Reetika Goel

Reetika Goel (Expert)
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19 May 2008
No.
Proprietor may choose to use Accrual basis for accounting.
Infact, Accrual basis is more logical to use.

R.V.RAO

R.V.RAO (Expert)
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19 May 2008 THERE IS NO COMPULSION ABOUT FOLLOWING EITHER CASH OR ACCRUAL SYSTEM -ON ANY KIND OF INCOME TAX ASSESSEE.
ONE MAY CHOOSE AS IT SUITS TO THE PARTICULAR ASSESSEE.
ACCRUAL SYSTEM IS BETTER AS IT IS FLEXIBLE AND MORE LOGICAL AND SUITS A TYPICAL BUSINESS UNIT IRRESPECTIVE OF THE FACT THAT THE BUSINESS UNIT IS BEING PROPRIETARY,FIRM/CO.
R.V.RAO