Let's say a customer pays for a TV with a credit card. What would this look like under cash-based vs. accrual accounting? In cash-based accounting, the revenue would not show up until the company charges the customer's credit card, receives authorization, and deposits the funds in its ...
The balance sheet represents an expansion of the accounting equation and explains the various categories of assets, liabilities, and owners' equity. The income statement explains changes in financial position that result from profit-generating transactions in terms of revenue and expense transactions. The...