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