What's the difference between cash basis and accrual basis?

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Accrual-based accounting

Accrual-based accounting will display money as it is earned rather than when it is collected. For example, an accrual-based report will show products and services that have been purchased with a gift card but will not show the actual sale of the gift card to a client. 

Cash-based accounting

Cash-based accounting will display sales as the money comes into the business. For example, a cash-based report will show the money earned when a client purchases a gift card but will not show the products and services that are purchased with that gift card.

For more information on accrual vs. cash base accounting, click here.


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