Interview Questions Answers.ORG
Interviewer And Interviewee Guide
Interviews
Quizzes
Home
Quizzes
Interviews Accounts Interviews:Account ExecutiveAccount ManagementAccountingAccounting ManagerAccounts PayableAccounts Receivable ClerkAdvertising Account ExecutiveAssistant AccountsAuditBankingBookkeeping ClerkClerk Accounts PayableCost AccountingExecutive AccountsJunior AccountantKey Account ManagersPayroll AssistantPayroll SpecialistSecretary AccountantSenior Accountant
Copyright © 2018. All Rights Reserved
Senior Accountant Interview Question:
Explain what is the difference between the accrual accounting and cash accounting?
Submitted by: MuhammadThe Cash Basis of accounting reports only transactions that have been completed in the current reporting period – or – what has “hit” the checking account (assuming all funds are deposited and disbursed only from that account) – The Accrual Basis of accounting reports all transactions that the entity has entered into and includes the asset, liability, income and expense related them.
In addition, the Cash Basis of accounting is considered OCBOA (Other Comprehensive Basis of Accounting ~ Other than GAAP) and the Accrual Basis (when implemented properly and fully) is considered GAAP (Generally Accepted Accounting Principles).
EDIT – The Accrual Basis is more desirable from a user's standpoint as it includes transactions that may exist were completed after the report dates that were initiated prior to the report date. It is generally more complete and more reliable than the cash basis – however, that does assume that the person preparing the statements has expertise of, not simply a cursory working knowledge of, GAAP and the accrual basis. For example, a set of financial statements printed out of QuickBooks are not necessarily GAAP compliant (or correct) although they may appear to be at first glance or to a layperson.
Submitted by: Muhammad
In addition, the Cash Basis of accounting is considered OCBOA (Other Comprehensive Basis of Accounting ~ Other than GAAP) and the Accrual Basis (when implemented properly and fully) is considered GAAP (Generally Accepted Accounting Principles).
EDIT – The Accrual Basis is more desirable from a user's standpoint as it includes transactions that may exist were completed after the report dates that were initiated prior to the report date. It is generally more complete and more reliable than the cash basis – however, that does assume that the person preparing the statements has expertise of, not simply a cursory working knowledge of, GAAP and the accrual basis. For example, a set of financial statements printed out of QuickBooks are not necessarily GAAP compliant (or correct) although they may appear to be at first glance or to a layperson.
Submitted by: Muhammad
Copyright 2007-2024 by Interview Questions Answers .ORG All Rights Reserved.
https://InterviewQuestionsAnswers.ORG.
https://InterviewQuestionsAnswers.ORG.