accounting

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accounting

by marjorina » Fri Jul 17, 2009 12:37 am

How is this different from the cash basis of accounting? Why is accrual accounting important? Nonprofit organizations are required to produce financial statements based on the accrual method of accounting.
marjorina  

Re: accounting

by admin » Mon Jul 20, 2009 10:52 am

NolaPro uses the accrual method of accounting.

Under the accrual method, transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them (receivables) is actually received or paid. In other words, income is counted when the sale occurs, and expenses are counted when you receive the goods or services. You don't have to wait until you see the money, or actually pay money out of your checking account, to record a transaction.

Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.
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