Accounting is defined as the process of identifying, measuring and communicating economic information to permit informed judgments and decision by qualified users of the information. It is also referred to as the Language of Business.
An accounting method is a set of rules used to determine when and how income and expenses are reported. The “accounting method” includes not only the overall method of accounting used, but also the method of accounting used for any single item. A tax return must be filed and the same method must be used for filing tax returns or tax records. The method used is chosen when you file your business’s first tax return. Sometimes, when more than one business is owned, different types may be used. Each one may benefit that particular type business better than another type. Each business must keep a complete and separate set of books and records so that it completely stands alone. The following accounting methods may be chosen from: CASH METHOD ACCRUAL METHOD SPECIAL METHODS for certain items of income and expenses HYBRID a combination method using elements of 2 or more of the other 3 above
The two that we will discuss during this seminar are the CASH METHOD and the ACCRUAL METHOD of accounting.