Cash basis


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Cash basis

Refers to the accounting method that recognizes revenues and expenses when cash is actually received or paid out.

Cash Basis Accounting

A system of accounting that recognizes revenue in the order in which it is received, and expenses on the same basis. Cash basis accounting does not deal with accounts receivable or accounts payable and only recognizes transactions actually paid for. This accounting system is easiest and perhaps best for organizations with few or no credit sales. See also: Accrual Accounting Convention.
References in periodicals archive ?
Before discussing conversion of cash basis financial statements, review the basics of the accounting equation that involve increases and decreases in total assets (see Table 1a).
9 CASH BASIS PERFORMANCE BASED ON OPERATING EARNINGS (1)(3) Cash basis operating earnings $477 $449 6.
Some nonprofits rectify this by using a modified cash basis of accounting.
At a minimum, though, the case does not stand for the proposition that a service taxpayer that keeps its books on the accrual basis is prohibited from using adjusting entries to convert to the cash basis for tax purposes.
A detailed reconciliation of the Company's adjusted cash basis net income or loss, which is a non-GAAP financial measure, to net income or loss under GAAP is included in the schedules to this press release.
Fitch's ratings reflect RLI's consistently strong underwriting profitability, moderate financial leverage, and strong earnings-based and cash basis interest coverage.
Modifications to the "pure" cash basis of accounting are acceptable it they are equivalent to the accrual basis and the modifications are logical.
As an example of these built-in gain and loss provisions, in the case of a cash basis personal service corporation that converts to S status and that has receivables at the time of the conversion, the receivables, when received, are built-in gain items.
Special reports for cash basis statements, profit participation, report on a statement of assets sold and liabilities transferred, reporting on the application of accounting principles, royalty reports
In certain situations, a corporation may benefit from a change in accounting method; for example, if an accrual-basis C corporation provides services on account, with payment received weeks or months after billing, a change to the cash basis would allow it to defer income recognition until receipt of payment.
Chaim Katzap of CB Commercial advised the church in this transaction which was contracted and closed in less than 30 days and was sold on an all cash basis.
Cash basis, modified cash basis and regulatory basis financial statements for various kinds of entities