Cash Vs. Accrual Accounting

  • Accountant
  • CMA
  • CPA (US)
  • CVA
  • CBA/MCBA
  • CFIRS
  • CWS

Published: September, 2021

Before starting this self study program, please go through the instructional document.

  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Overview

  • Cash Method
    4 mins
  • Cash Basis Accounting Preference
    10 mins
  • The Accrual Method
    20 mins
  • Accrual Concept Examples
    31 mins
  • Example of Accrual and Cash Methods
    49 mins

Course Description

Within accounting or bookkeeping, two types of accounting methods are utilized to record transactions. These methods are at the core of the accounting/bookkeeping function.  They  include:

  • Cash Accounting – recognizes revenue and expenses only when money changes hands.
  • Accrual Accounting – recognizes revenue when it is earned and expenses when they are billed out (but not paid).

To ensure your entity is properly recording and tracking transactions, it is important to understand the basis variances between cash and accrual accounting and when they are best utilized. 

The cash approach may be preferred where all or most of the following conditions apply. The company: Uses single-entry accounting; has relatively few financial transactions per day; does not sell on credit (does not deliver goods or services and then invoice customers for payment later); at the time of sale, customers must pay either by cash, written check, bank transfer, or 3rd-party credit/debit card; has very few employees.

The accrual basis is used by all larger companies, for several reasons: its use is required for tax reporting when sales exceed $5 million; public companies that trade shares on stock exchanges are required to follow GAAP which require accrual-based accounting; investors want the most accurate picture possible of the state of a company's finances. If in doubt check with your accountant as to which method you should use; a company’s FS can only be audited if they have been prepared using the accrual basis. 

This course focuses on the concepts of accounting methods specifically the cash basis accounting method and the accrual basis accounting method.  We examine how each method impacts a business’ financial position and financial statement.  We utilize various scenarios and compare and contrast the two methods.


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Learning Objectives

  • To explore the cash basis of accounting.
  • To explore the accrual basis of accounting.
  • To introduce the concept of reversing entries.
  • To examine the advantages and disadvantages of cash basis and accrual basis accounting.
  • To examine the analytics of accrual accounting.
  • To compare and contrast the accounting methods through examples.

Recommended For

This Online Accounting CPE/CE webinar is recommended for CPAs who wants to help their clients choose the right method

Who Should Attend?

  • Accountant
  • Accounting Firm
  • Accounting Managers
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Entrepreneurial Accountant
  • Entrepreneurial CPA
  • Senior Accountant
  • Staff of Accounting Firm
  • Young CPA

Course Qualification

Webinar Qualifies For

  • 2 CPE Credit for Certified Valuation Analyst (CVA)
  • 2 CPE Credit of Accounting for Certified Public Accountants (CPA-US)
  • 2 CPE Credit for Certified Management Accountants (CMA)
  • 2 CRE Credit for Certified Financial Examiner (CFE)
  • 2 CPE Credit for Certified Business Appraiser/Master Certified Business Appraiser (CBA/MCBA)
  • 2 CE Credit for Certified Fiduciary & Investment Risk Specialist (CFIRS)
  • 2 CE Credit for Certified Wealth Strategist (CWS)
  • 2 General Credit for Accountant/Bookeeper

Additional details

  • Course Level :
    Basic
  • Credits :
    2
  • Instructional Method :
    QAS Self Study
  • Pre-requisites :
    None
  • Advance Preparation :
    None

NASBA APPROVED

MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org.

Presenter

About Presenter

Lynn Fountain, CRMA, CPA (US), CGMA, MBA

Owner, Lynn Fountain Consulting and Training

Lynn Fountain has over 39 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance.  Lynn has held two Chief Audit Executive (CAE) positions for international companies.   In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees.  The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.

Ms. Fountain is currently engaged in her own consulting and training practice.  She has successfully executed on several consulting assignments spanning areas of accounting, risk, ERM and internal audit.  She is a highly sought-after trainer and international speaker and has produced hundreds of courses delivered through seminars, conferences and on-demand training.  She is the author of three separate technical books. 

  • Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”.
  • Leading the Internal Audit Function
  • Ethics and the Internal Auditor’s Dilemma

Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials. 


About Company

Lynn Fountain Consulting and Training

www.lynnfountain.net/

Ms. Fountain has become known as an international trainer on topics of Leadership, Internal Audit, Accounting, Finance, Ethics, Business Processes, Bookkeeping, Cybersecurity and Business Issues.  She has over 150 training topics that can be tailored to meet your needs.

Faq

FAQs content

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