Why GAAP requires the accrual basis?

GAAP inclines toward the accrual accounting method since it records sales when they happen, which gives a more clear knowledge of an organization's performance and actual sales patterns rather than exactly when payment is received.

What are the two main principles of accrual accounting?

Accrual basis accounting consists of two fundamental principles - the matching principle and the revenue recognition principle.

When should you use accrual accounting?

Accrual accounting is an accounting strategy where incomes and expenses are recorded when they are acquired, regardless of when the cash is received or paid.

Pramit Pratim Ghosh, Author at Tally Solutions

"Breaking down complexity with every article"

Pramit Pratim Ghosh

Pramit, who has been with Tally since 2012, leads social media initiatives as part of the digital marketing team. Since the inception of GST in 2017, he has written blogs on GST law, impact and opinions - for customer, tax practitioner and student audiences - as well as on generic themes such as automation, accounting, inventory, business efficiency - for business owners.

Pramit, who has been with Tally since 2012, leads social media initiatives as part of the digital marketing team. Since the inception of GST in 2017, he has written blogs on GST law, impact and opinio... Read More

Pramit, who has been with Tally since 2012, leads social media initiatives as part of the digital marketing team. Since the inception of GST in 2017, he has written blogs on GST law, impact and opinions - for customer, tax practitioner and student audiences - as well as on generic themes such as automation, accounting, inventory, business efficiency - for business owners. Read Less