Difference between cash basis and accrual basis: Explained
When you get down to it, the difference between cash basis and accrual basis accounting is all about timing. Cash basis accounting is simple: you record revenue and expenses only when money actually changes hands. Accrual basis, on the other hand, records revenue when you earn it and expenses when you incur them, whether or not the cash has moved. Think
General Ledger vs Trial Balance The Key Differences
When you're digging into your company's financials, two terms you'll constantly encounter are the general ledger and the trial balance. It’s easy to get them mixed up, but they play very different roles. The simplest way to think about it is that the general ledger is the complete, unabridged storybook of every single financial transaction your company makes. The trial balance,
Mastering the Trial Balance Format
At its core, a trial balance is a straightforward list. It takes every single account from your general ledger and arranges them in one column, with their final balances sorted into two neighboring columns: one for debits and one for credits. The whole point of this exercise is to do a quick gut check and make sure the total of