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Differentiate Cash and Accrual basis

Differentiate Cash and Accrual basis

Learn the difference between Cash and Accrual basis and how to set them as preferences in QuickBooks Desktop for Windows.

Accrual basis
In this accounting method, the time when you enter a transaction and the time when you actually pay or receive cash may be two separate events.
An accrual basis report shows income regardless of whether your customers have paid your invoices and expenses regardless of whether you have paid all your bills.
Cash basis
A bookkeeping method in which you regard income or expenses as occurring at the time you actually receive a payment or pay a bill.
A cash basis report only shows income if you have received cash and expenses if you have paid cash.
Report preferences
Summary reports can be on a cash or accrual basis. They summarize groups of transactions and usually have the word Summary in their titles.
Detail reports list individual transactions. They always default to accrual basis when you create them from the Reports menu.

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