Corporate Finance Question:

Define the Cash System of Accounting?

Tweet Share WhatsApp

Answer:

Cash System of Accounting: This system records only cash receipts and payments. This system assumes that there are no credit transactions. In this system of accounting, expenses are considered only when they are paid and incomes are considered when they are actually received. This system is used by the organizations which are established for non profit purpose. But this system is considered to be defective in nature as it does not show the actual profits earned and the current state of affairs of the organization.

Download Corporate Finance PDF Read All 37 Corporate Finance Questions
Previous QuestionNext Question
Define Profitability Statement?Define Capital Expenditure?