Accounting question- basis of accounting
What are the different basis of accounting? When is it appropriate to use the cash, accrual, or tax basis? Which one is better? Why?
Looking for an answer in about 150 or so words
Accounting basis often refer to the different techniques or methods employed by firms in accounting for returns and expenses. It is a common practice by most firms to use the generally accepted Accounting Principles (GAAP) in the forms of cash or accrual basis accounting. Cash basis is mostly used by small businesses and for personal finances. It captures revenue only when money is received and expenses only when…