easy · Investment Banking accounting
What is the primary difference between Cash Accounting and Accrual Accounting regarding Revenue Recognition?
- Accrual recognizes revenue only when cash is received; Cash recognizes it when the work is earned
- Cash recognizes revenue when the transaction becomes earnable; Accrual recognizes it once realized
- Accrual recognizes revenue when it is earned and realized; Cash recognizes it only when cash hits the bank
- There is no real difference in revenue recognition timing; the only distinction lies in how expenses get tracked
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