O'Reilly logo

The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Choosing a Method

You may wonder which accounting method is better. The truth is that both methods give you only a partial view of how your business is doing. The accrual method more accurately matches your income and expenses, but if this method is not managed carefully, you could lose track of your actual cash flow. For example, you could be recording lots of income for jobs completed, but not receiving payments on a timely basis. In other words, your bank account could be empty, but you wouldn’t notice this lack of cash by just looking at your income statements. Yikes! What happens when that next check bounces? Don’t worry. We talk about how to manage cash flow when using accrual accounting when we talk about cash receipts and disbursals ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required