Popular Courses
COMM 217
Concordia University
ACCT 2301
The University of Texas at Dallas
Intro to Financial Accounting
General Course
COMM 293
University of British Columbia
Intro to Financial Accounting
University Study Guides
MGCR 211
McGill University
ACCT 1220
University of Guelph
Intro to Financial Accounting
University Study Guides
ACCT 217
University of Calgary
ADMS 2500
York University
COMMERCE 1AA3
McMaster University
ACCTG 211
University of Alberta
COMM 111
Queen's University
ADM 1340
University of Ottawa
BU127
Wilfrid Laurier University
RSM219H1
University of Toronto
COMM 1101
Dalhousie University
AFM 101
University of Waterloo
ACTG 2010
York University
BUS 251
Simon Fraser University
0:00 / 0:00
Accrual Basis vs Cash Basis Accounting
Accrual Basis Accounting
- Recognizes revenues when they are earned
- Recognizes expenses when they incurred or used
- This method is the widely used in financial accounting as it is required under IFRS and GAAP
Cash Basis Accounting
- Recognizes revenues when cash is received
- Recognizes expenses when cash is paid
- This method is mainly used by small businesses and personal finance
0:00 / 0:00
The Fiscal Year
Unlike the calendar year, a company can choose their year on any day of the year. The fiscal year represents a year for tax and accounting purposes.
- Can be any day of the year but company's should be consistent each year
- All accounts must be up to date at the end of the fiscal year
- Adjusting journal entries and financial statements are prepared on the last day of the fiscal year