Which accounting method can be selected in QuickBooks?

In QuickBooks, users can select between cash or accrual basis accounting, which is fundamental in determining how income and expenses are recorded.

Selecting the cash basis means that transactions are recorded when cash changes hands, which provides a straightforward approach where revenues and expenses are recognized only when money is received or paid. This can be particularly advantageous for smaller businesses that focus on cash flow.

On the other hand, the accrual basis recognizes revenues and expenses when they are incurred, regardless of when cash is exchanged. This method provides a more accurate picture of a company's financial position, aligning revenue with the expenses incurred to earn that revenue.

Being able to choose between these two methods allows businesses to tailor their financial reporting to their specific needs and operational realities, making it a powerful feature within QuickBooks.