Cash vs Accrual Accounting: Which is Best for Your Business?
Vložit
- čas přidán 29. 06. 2024
- Subscribe: bit.ly/2HJlq46
It's a concept that confuses most business owners and even some accountants and that's the difference between cash and accrual accounting!
This is important in business because it determines how your revenue and profits are reported and ultimately the taxes you pay.
In this video, I breakdown the single biggest difference between the 2 accounting methods.
Outline:
Intro: (0:00)
Difference between cash and accrual accounting: (4:03)
Cash accounting example: (4:12)
Benefits of cash accounting: (4:55)
Accrual accounting explanation: (5:37)
Benefits of accrual accounting: (6:34)
IRS & tax implications: (7:58)
Recap: (9:42)
Interested in talking with someone from our team? Sign up to get notified when we are accepting new clients here: lyfeaccounting.com/coming-soon/
///
Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
I've searched all over CZcams for this information!!!! Thanks so much!!!
Glad it was helpful!
Best description of these 2 methods I have found yet. Thanks :)
You're a breath of fresh air. I am so glad I found you. So easy to understand and precise. Most importantly you explain slowly and make iteasy to understand. Thank You Thank You
You are awesome. I completely understand this concept now. Thank you! Just golden!
Hi, Krystal. Thank you for the breakdown. I just started a financial accounting course and I'm sure I will be back to your channel. I like the way you work. FWIW, I appreciate the fact that you included the channel intro after providing some initial information.
Thanks for this information - it's been a minute since I took an Accounting course and this is a great refresher as I am a new Business Owner.
Thank you for making it so easy to understand
Thank you for the explanation!
I in turn applaud you! Thank you for this instructional video.
i loved the joke in the beginning!! Agree cash accounting is great for small business
Thanks! :)
The example really helped me understand! Thanks.
Glad to hear that!
Wow! That was indeed very insightful. Thanks for sharing!
Thanks for watching!
you guys do a pretty good job, but every time i watch your specific video I double check and make sure that if I Subscribed to this channel...
Thank you :)
Awwww thank you! & Thanks for the sub!
your videos are awesome ! Love the energy! I have a question… How about accounting for day traders?
Excellent delivery. Please make a video to explain preparation of cash flow statements
Clear and concise presentation- nicely done. Thank you.
The joke was good too lol
You rock Ryan!
I've been an independent contractor for 14 years. I've always understood this concept intuitively, but it's nice to know there are actual terms associated with it. I'm not just going crazy. I've performed work for several clients who don't pay for months. When do I record it?
Most people are on a cash basis, so you would record it when you received it.
Most small businesses find Cash Basis easier and more intuitive and it's an accepted mothod of accounting. If you want to be compliant with GAAP then do the Accrual Basis. It doesn't hurt to learn both.
@@NicholiasParhamBut depending on your gross revenue, accrual basis is required by IRS. Moreover, the matching principle is ignored with cash basis. She did not cover this in details because the target audience is business owners who have NEVER read an accounting book
The video is great. I would decrease the sound effects.it was distracting
Used up prepaids, depr, amort and sales taxes are not reflected on cash basis income statement.
GEMS 💎
Thanks
You're welcome!
What is recommended for a small business starting out to go with?
Cash Accounting
Thanks for helping me earn my PhD @ CZcams University
Hahaha! You are welcome!
Nice to see people of color talking accounting, there are not many of us.
This is true, are you an accountant as well?
@@LYFEAccounting Got one more year of school before finishing my MAcct, so I'd like to think so. Still have a lot to learn though.
Love the presentation. Love the presentor 😍 1. Is she single?
2. Does she like mexicans? Lol