BiG Consulting Corporation

In a prior article on Cash Basis I covered how it should be setup.  Now for a real example.  When Standard Vouchers are paid and Cash Basis kicks in, it uses the voucher’s Expense GL coding for the debit, and cash account for the Credit.  Similarly in AR:  when cash is received, Cash Basis uses the invoice’s Income GL coding for the credit, and cash account for the Debit.

But what will Cash Basis do for non-standard vouchers?  For example, if the voucher is created via a 3-way match?  Where will the offset to the cash account come from?  To find out, I setup a test. Read more…

Introduction

The Cash Basis accounting method is straightforward, and more intuitive to a non-accountant than the Accrual Basis method.  In Cash Basis, income is recognized when cash is received, and expense is recognized when a debt is paid.  While Cash Basis accounting is rarely used in industries like manufacturing or distribution, it’s common in real estate, government and non-profit industries among others. Read more…