This chapter contains the topic:
Cash basis accounting is an accounting method that recognizes revenue when monies are received and expenses when monies are paid out. This accounting method shows only cash that is actually received or disbursed during a particular accounting period. You might be required to use cash basis accounting due to a requirement in an oil well lease, venture capital, or partnership, or for tax purposes.
The timing of receipts and disbursements might differ from the period of operating activities. Therefore, the period during which cash basis transactions are recorded might differ from transactions that are recorded for the accrual accounting period.
The system maintains accrual entries in the AA (actual amount) ledger. When you use cash basis accounting, the system generates parallel transactions from the AA ledger and updates the AZ (cash basis) ledger.
The Cash Basis Accounting Guide includes the following topics:
Setting up cash basis accounting
Creating cash basis entries
Reviewing and posting cash basis entries
Printing cash basis reports