QuickBooks HelpQuickBooksHelpIntuit

Differentiate Cash and Accrual basis

by Intuit Updated 4 months ago

Learn the difference between Cash and Accrual basis and how to set them as preferences in QuickBooks Desktop for Windows.

Accrual basis

  • In this accounting method, the time when you enter a transaction and the time when you actually pay or receive cash may be two separate events.
  • An accrual basis report shows income regardless of whether your customers have paid your invoices and expenses regardless of whether you have paid all your bills.

Cash basis

  • A bookkeeping method in which you regard income or expenses as occurring at the time you actually receive a payment or pay a bill.
  • A cash basis report only shows income if you have received cash and expenses if you have paid cash.

Report preferences

  • Summary reports can be on a cash or accrual basis. They summarize groups of transactions and usually have the word Summary in their titles.
  • Detail reports list individual transactions. They always default to accrual basis when you create them from the Reports menu.

To set your preferences:

  1. Log in to your file as the Administrator. Make sure you are in Single-User Mode.
  2. Go to the Edit menu, then select Preferences.
  3. Select Reports & Graphs, then go to the Company Preferences tab.
  4. In the Summary Report Basis section, select Accrual or Cash.
  5. Select OK.

Important:

  • In QuickBooks 2018 and later, you can easily toggle a report between cash and accrual views. However, the report reverts to the default basis that was set up in the preferences once it is closed.
  • Journal entries that impact a Balance Sheet account, as well as an income/expense account, affect both cash and accrual basis reports.
QuickBooks Desktop Mac PlusQuickBooks Desktop Premier 2021QuickBooks Desktop Premier PlusQuickBooks Desktop Pro 2021QuickBooks Desktop Pro PlusQuickBooks Desktop for Mac 2020QuickBooks Desktop for Mac 2021

Sign in now for personalized help

See articles customized for your product and join our large community of QuickBooks users.