Whats the difference between cash-basis and accrual-basis accounting?
q021.style.display = ‘none’; Cash-basis accounting means that you only enter transactions as money is spent or received. Lets say today the plumber submitted a bill for $500. for work he has completed, but you wont be paying it until next month. If youre on a cash basis, you wont enter a transaction until you pay the bill next month. Accrual-basis accounting means you keep track of future obligations. You would enter the $500. plumbing bill today as an Accounts Payable transaction, so that it will be included as part of the short-term liabilities on this months Balance Sheet. When you pay the bill next month you would post it to Payments. Most small churches prefer cash-basis accounting because it is less complicated. If you dont have significant obligations that span more than one month, you probably dont need to use the accrual method. If you have a major obligation (such as a mortgage), you can track it as a liability–but still treat other obligations on a cash basis. If you decide
