Explore the differences between cash and accrual accounting, practice adjusting statements from one to the other for suitable analysis, and approach financial information confidently.
- Learn the questions and answers experts encounter when reviewing cash-based financial data
- Practice adjusting cash receipts and cash disbursements to get an accrual-like income
- Distinguish the differences in financial metrics when assessing cash versus accrual statements
Cash is king? Not when it comes to accrual information! Learn why cash-only information presents an incomplete picture for many users of financial data and how professionals work under such circumstances.
Financial decisions are often based on accrual information, including accounts receivable that generate credit sales, inventory production for future sales, and accounts payable that describe contractual obligations. These are not readily visible using cash-only data, so we must adjust from cash to get accrual-like information. With the adjustments, we may understand a company’s economics better when assessing financial performance. Accrual accounting, rather than cash accounting, generates an accrual income — the bottom line we care about.
We will use the adjustment principle and approach the steps necessary to convert from cash to accrual data. By experiencing the practice of taking cash-based accounting data and bringing it closer to accrual information, we can paint a suitable picture for financial decision-making.
This course is for all general business owners who work with lenders and financial professionals working with prospects and clients who rely on cash-based statements.
What You’ll Learn In Cash-to-Accrual Accounting?
- Differentiate the rationale for using cash and accrual information
- Establish the approach to convert cash receipts and disbursements to relevant accrual data
- Practice and adjust assets, liabilities, revenues, and expenses to get cash statements closer to an equivalent set of accrual statements
- Link the different financial statements and distinguish their differences when looking at financial metrics
More courses from the same author: Corporate Finance Institute
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