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Voluntary Essay Topics & Paper Examples

Accrual Method Checkpoint HSM/260

In a nonprofit organization it is important to make sure we are utilizing the best accounting system for our organization. Organizations that are non-profit are expected to provide financial statements that are based upon the accrual method of accounting. The accrual method of accounting differs from cash basis accounting. In the accrual method, income is recognized when services are rendered (Kokemuller, 2013). The accrual method focuses on recording revenue and expenses when the transaction occurs. Cash basis of accounting records income as money is received. An example of cash basis accounting is when a non-profit uses their checkbook to record debits and transactions as they occur. Accrual accounting is important because it ensures accountability in a non-profit organization. In an…