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What is Cash Basis Accounting?

Most small businesses use the cash basis method of accounting, which is based on real-time cash flow. In cash method, you report an expense when it is paid, and record income when it is received. So, the day you receive a check, it becomes a cash receipt. And you record your expenses when you pay your bills, not when the bill is received.

By the way, the word “cash” is not meant literally — it also covers payments by check, credit card, barter, etc.

For more information, contact Elite Bookkeeping & Tax Services at (800) 416-3820 or (775) 884-6188 Address: 123 West Nye Lane, Suite 103, Carson City, NV 89706. Visit our website at www.elitebookkeeping.biz