Cash Basis Accounting

Business / Taxes / Cash Basis Accounting: Cash basis accounting is one of two ways of recording revenues and expenses. Using this method, a company records income on its books when it receives a payment and expenses when it makes a payment. In accrual accounting, by comparison, a company counts revenue as it’s earned and expenses as they’re incurred. For example, when a magazine company sells annual subscriptions, it receives the cash for the subscriptions at the beginning of the year, but it doesn’t earn the whole amount of the subscription cost until it has sent the subscriber a full year’s issues of the magazine. In cash basis accounting, paid subscriptions are recorded as revenue when the company receives the payments. In accrual accounting, the company records revenue only as the subscription is fulfilled. A $24 subscription for 12 monthly issues of a magazine would result in immediate revenue of $24 in cash basis accounting, versus an accrual of $2 of revenue each month under accrual accounting.

Other Words for Basis

Basis Noun Synonyms: foundation, base, bottom, heart, footing, principle, underpinning, infrastructure
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Other Words for Cash

Cash Noun Synonyms: money, currency, bills, notes, banknotes, change, hard cash or money, specie, coin of the realm, legal tender, moolah, dough, bread, loot, spondulicks or spondulix, lolly, ready, readies, scratch, gelt
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Accrual Basis

Business / Accounting / Accrual Basis: Gross income is recognized when earned. MORE

Fare Basis (Code)

Life Style / Travel / Fare Basis (Code): The sometimes confusing code or codes on which the price of an airline ticket is based. Some itineraries contain many different codes. Most will indicate whether a fare is refundable or not. If even o MORE

Financial Accounting

Business / Accounting / Financial Accounting: The area of accounting concerned with reporting financial information to interested external parties. MORE

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