Change from Accrual to Cash-Basis Accounting

ClosedBefore you can perform this task

ClosedTo start using cash-basis accounting

Step 1: Decide whether to change from Accrual to Cash-Basis Accounting

Step 2: Change from Accrual to Cash-Basis Accounting

Step 3: Finish Entering History (if you haven't already done so)

Once you have decided to switch:

  1. (Optional) Make a backup of your company files.
  2. In the Home window, on the Setup menu, choose Settings.
  3. Click Company and then System.
  4. Select the Use Cash-Basis Accounting option.
  5. Enter a Cash Accounting Date. This is the date on which you want to begin cash-basis accounting, the cut-off point that divides your accrual-basis entries from your cash-basis entries.
  6. Click OK.

Notes:

If you must enter an accrual-basis transaction, date it earlier than the Cash Accounting date. The program treats a purchase or a sale dated earlier than the Cash Accounting date as an accrual-basis entry, and updates the related accounts immediately.

After you start using the cash-basis accounting method, you should not change the Cash Accounting date. You may end up with an unexpected mixture of cash-basis and accrual-basis entries in the same time period. Similarly, be sure you do not mix cash-basis and accrual-basis entries in the same time period as a result of changing from one method to another.

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