ProAdvisor

Re: Does Your Business Use Cash or Accrual Method Accounting?

Actually, you missed a method. There is a 3rd method called Hybrid. That is a combination of the cash method & accrual method.

 

At one point, if you sold products you had to be on the accrual method for the products sold. If you sold services you could use either cash or accrual methods. However if you sold products & services you can be on both methods. Cash for services & accrual for products hence the hybrid method.

 

Since then, that tax laws have change but some businesses are on the hybrid method.