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What is the difference between accrual and cash accounting? When might an accountant use cash basis accounting without violating generally accepted accounting principles?

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Cash based accounting focuses on the income that is received. Expenses are only recorded when they are paid. This can give a distorted  idea of how a company financial stands.

Accrual based accounting focuses on the income that is due to goods that are exported, or due to services rendered.  Expenses are recorded when a firm is knowledgeable that they will have to pay it out. Accrual is accounting matches the expense, paid or not,to the correct revenue and gives a more realistic total for a firm.


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