[Anonymous]

I am having the hardest time with this topic for some reason, and I know this is about as basic as it gets 🙁 Does anyone have any tips they could share that might help me understand this topic better? FYI – I am using Yaeger HomeStudy. Thanks!

[killaking]

Here is an example

there is an invoice 2 companies get it one cash one accrual.

A is cash and B is Accrual its 1/1/X1

I send a bill due on 1/31/X1 on 1/11/X1

A does nothing

B debits Exp credits AP

its 1/31 and bill is due

A is cash so it will hit his books Debit exp and credit cash

B is accrual so he will adjust his books and will Debit AP and credit Cash

the difference is Cash basis doesnt have AP or AR accounts.

FAR: 7/17/10 missed exam FML reschedule 8/29/10-77 EPIC!
REG: 5/31/11-73 SMH, 8/31/11-85
BEC: 4/15/10-72 : retake 10/3/10-80
AUD: 11/28/10-74, 02/27/11-71 FML, 8/1/11-80
Ethics 10/22/22-80, retake 11/28/11 - 88

[killaking]

My example is pretty basic do yoou guys get it?

FAR: 7/17/10 missed exam FML reschedule 8/29/10-77 EPIC!
REG: 5/31/11-73 SMH, 8/31/11-85
BEC: 4/15/10-72 : retake 10/3/10-80
AUD: 11/28/10-74, 02/27/11-71 FML, 8/1/11-80
Ethics 10/22/22-80, retake 11/28/11 - 88

[Anonymous]

killaking –

I should have clarified this better. I understand what cash basis means and what accrual basis means. I'm just having a hard time with the calculations of going from cash basis to accrual basis. I have tried T accounts but those get me confused, and the formula way confuses me, too because on some items you have subtract ending and add beginning and on others you add ending and subtract beginning.

[jeff]

Not sure if this helps you, but this is what I have in the NINJA notes…

Sales Revenue from Cash Basis (SPEAR-BAR)

Customer Payments

+Ending Accounts Receivable

–Beginning Accounts Receivable

= Sales Revenue – Accrual Basis

COGS from Cash Basis (CRAP-I)

Cash Remitted (i.e. paid – made acronym easier)

+Increase in Accounts Payable

–Increase in Inventory

= COGS – Accrual Basis

[Sparty On]

A change in assets takes the same sign (an increase in assets is added and a decrease is subtracted) and a change in liabilities takes the opposite sign (an increase is subtracted and a decrease is added). You will do the opposite when doing the indirect method for a SCF because you are going accrual to cash.

AUD - 92
REG - 88
FAR - Awaiting score
BEC - 8/13

[Anonymous]

Thanks Jeff and Sparty! Both of your responses were very helpful 🙂

[Author]

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