Changes

Under cash accounting, [[revenue]]s are recorded on the accounting records when payment is received under [[cash accounting]].  Similarly, [[expense]]s and [[liability|liabilities]] are recorded when payment is made.

Under cash accounting, [[revenue]]s are recorded on the accounting records when payment is received under [[cash accounting]].  Similarly, [[expense]]s and [[liability|liabilities]] are recorded when payment is made.

A hybrid form of cash accounting, called '''modified cash accounting''', is used in many cases.  It generally works the same as cash accounting except for when a capital asset is purchased; in that case, the asset cannot be charged in the year of purchase but is subject to [[depreciation]].

A hybrid form of cash accounting, called '''modified cash accounting''' (also called '''modified accrual accounting'''), is used in many cases.  It generally works the same as cash accounting except for two major areas:  long-term assets are capitalized and subject to [[depreciation]] or [[amortization]], and long-term liabilities are recorded as debt and reduced as payments are made.

[[Category:Accounting]]

[[Category:Accounting]]