Accrual basis and cash basis accounting in odoo

Question

Hi,
Please explain the accrual basis and cash basis accounting in odoo, and how it works.

Niyas Raphy (Walnut Software Solutions) · Accepted Answer

Hi,
The cash basis and  accrual basis of accounting are two different methods used to record
accounting transactions. The core underlying difference between the two
methods is in the timing of transaction recordation. When aggregated
over time, the results of the two methods are approximately the same. A
brief description of each method follows:

*Cash
basis: Revenue is recorded when cash is received from customers, and
expenses are recorded when cash is paid to suppliers and employees.*

*Accru

Ermin Trevisan · Answer

Just as an amendment to Niyas' good answer: this is mostly relevant to countries having a VAT regime. As an exception from the regular regime, many VAT countries allow small companies to file their VAT returns on a cash basis, as this puts less stress on liquidity.
From an economic point of view, the time of performance or consumption is relevant, because that is the time, when contractual obligations or valuation requirements arise, and not the time of payment. Therefore, as long as your compan

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