Cash vs Accrual Accounting Explained

[@Vikermajit]

Brilliant video for beginners to understand the accrual concept. However, I think that instead of saying ' book a transaction', it is perhaps easier to follow if the word 'record' is used in place of 'book'.

[@ximena.morales]

I have an accounting final and I did not understand accrual basis accounting all semester freaking out until i watched this video THANK YOU

[@Hyghly_defyned_27]

I've watched other videos, but this is by far the one that was the easiest to understand! Thanks!

[@TheScaletIbisNW]

I feel the accrual method would be fantastic for larger businesses or anything with a contract. I'm a smaller ecommerce business. I have worked out specialty orders and had a customer change their mind or drop off the face of the planet. The cash method works because it an absolute.. I get cash, I spend cash, that actually happened... I feel if I tried the accrual method I would do a lot of back tracking for canceled orders or orders that never really materialized.

[@bumsomejoeyy2493]

Yeah. Cash is better.

[@brianrawcliffe871]

In accrual, it appears that only revenue earned is recorded. So basically, when you complete a job or order for a customer, that’s when you have earned the revenue and the customer now owes the funds. It creates a much easier foundation from which to ensure no unpaid job falls through the cracks. You don’t record potential business. You record actual business. Revenue earned, accounts receivable is “I complete the job, I earned $X. If you (customer) haven’t yet paid, you owe me $X”. Accounts receivable never goes back down until the cash is actually received.

[@rowheim]

Thanks man! You made it super easy to understand

[@jasongrunfeld9349]

I have never written a comment on KZbin but this is incredibly helpful - amazing explanation, thank you!

[@matthishelms2634]

you are absolutely the greatest...ou just saved my presentation.

[@prudentwomen]

This is AWESOME!!! So clear and easy to understand!

[@trebomit]

Thank you so much for explaining this. I feel like I learned more in this video than I did in college! :)

[@TheH1R3N]

You made a lot easier than my own professor, appreciate!

[@kakundwanaome1836]

very good explanation

[@gabrielamontenegro8090]

Beautifully explained

[@diontaedaughtry974]

Thank you this was very helpful and informative 👍👍

[@kadeemgittens1126]

Thank you for making that easy! I wish they thought it like that is class

[@shadenox6933]

so if I purchased some raw materials in bulk and processed it in to smaller goods, under the accrual system, I would only file any costs to my business once I sold one of those smaller goods. I.e. I would file how much I made for selling that good, calculate how much it cost to produce that individual good, and file that cost as an expense. Correct? So I have 2 questions. What if I do not sell all of the smaller goods that I produced. My business will still have incurred a cost, yet received no benefit for it. How would I account for that when filing taxes using the accrual system? the second question is, if I spent money on purchasing tools to help me manufacture the smaller goods, how would I report the cost of the tools? would I file the expense once I sold my first smaller item? I.e. I would file a profit for the individual sale, file the expense for the cost of the material, and file an additional expense at the same time for the tools. and on later subsequent sales only file the profit of sale and cost for materials, and not include cost of tools?

[@bhagyashreehegde2343]

This was very much in detail. Thank you :)

[@sashadecker8239]

This was an amazing explanation! Thank you!

[@WijthaGayan]

Great explain

[@elenaecharri7374]

Great Video. Thanks!

[@diorpratt5333]

Lol you said one word that made this make sense to me. RECEIVABLES thank you so much... on March 14th 🤣🤣🤣

[@pandyahk2004]

Thanks a lot. But I have a question, I do have a landscaping business and I have been running on accural basis but the problem is sometimes I do have bad debtors and doesn't pay but.i have all paid GST on those transactions and in these cases I looses on both sides. What should I do?

[@fasthardware6293]

What is the most popular method for freight broker small business cash or accrual?

[@bozomonster]

If I receive a check for payment from my customer on December 28th 2022 and enter the payment into Quickbooks but don't deposit it until January 1st 2023 does it go towards 2022 or 2023 income?

[@rudiredmako8117]

Great video mate!

[@Circa1628]

You need to explain hybrid method

[@luayobaidi1170]

Each system will have its own loopholes that companies could use to fraud the system and report benefits or loses based on their interest, what do you think the fraud that a cash-based system accounting could have as fraud possibility, and how to prevent it by an auditor?

[@marwaaqrabawi1849]

you saved a life thank you

[@Ignitespot]

Happy to help!

[@AcuityEcommerce]

Great video!

[@greggh]

Of course you should book revenue and expense when you incur them. To me accrual basis is intuitive. Cash basis just seems wrong.

[@sel_gaming8916]

Gregg H Soooooo true

[@robertrutherford6140]

very helpful, thanks!

[@tubeprincessamirahtv7993]

How do you increase your cost of goods sold and Accounts payable? Increase means Debit the AR and increase in AP is ?

[@johnathanbolin4009]

Credit

[@qusaiahed5572]

Dear is there any use of Account Payable and Account Receivable in Accrual Basis Accounting ?

[@bobespnza-la7030]

Qusai ahed if you find anything out please CC me

[@brenolustosa6338]

Thank you so much man.

[@Ignitespot]

Happy to help

[@cheesybuckets2622]

Awesome

[@Ignitespot]

We had to reply. Anyone with the username Cheesy Buckets deserves some attention! Thanks for watching.

[@annzhou8112]

Thanks . It's helpful.

[@rob8482]

Yes the IRS is smart...like a cobra lol Good video.

[@therdd1590]

Thank youuu

[@salomonmotinga8508]

What about when you as a business is been paid in advance?

[@TheLUISA411]

For a rent to own business ... what is the best method? I can’t tell😞 people take furniture but will pay for it later. But store owner pays for furniture when he buys it....

[@cascam1]

interested in acting? you're natural!

[@Ignitespot]

Yeah, they tried to cast me for a recent Brad Pitt role, but I was too busy making these awesome accounting videos. :) Thanks for the compliment!

[@hanaaahmed7044]

hehehehe cool

[@saddiqjeelani563]

"Act" naturally. English is so weird.

[@rahafalsahafi6774]

Thaaaaaaank you soooo much

[@therealmavericka7304]

Paul Kimmel??

[@98Brendah]

i love you

[@detroit89k97]

Where day do dat at 😂😂

[@Sunakfilth]

I get paid when I finish job... Not 2 or 3 months down the line.. Fk that shit... I buy materials.. I pay there and then