Question by  joana (12)

What businesses use cash based accounting?

I need to know when cash based accounting is used.


Answer by  Chaneygirl (1755)

Use when there are no accounts receivable, accounts payable or inventory. You can use a hybrid method if you have inventory but not the receivables or payables. Recoginizing receivable will record income before you have the cash and recognizing payables will record expenses before you pay them. Most corporations use the accrual method of accounting.


Answer by  tamarawilhite (17883)

Businesses that refuse to run debt use cash based accounting. Many businesses with very fluid labor, such as construction and restaurants, will use cash based accounting.

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