Discussion:Accrual Method to Cash
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Discussion Forum Index --> Accounting Questions --> Accrual Method to Cash
CATaxAccountant (talk|edits) said: | 3 March 2009 |
| So I am doing basic tax returns at my office and occasionally I get a corporation with an accrual basis in which needs to be converted to cash basis (Tax Basis). The few I received, have already been "adjusted" to cash but I want to learn how to do this. My managers are too busy and I'd rather not bother them. What would be ideal first steps. What are some things to look for? Its always AP and AR which gets reduced right? There is not much info on the internet (except for cash to accrual). | |
| 3 March 2009 | |
| A/P and A/R are good places to start, but there are a host of other accounts as well. Deferred revenues and expenses, accruals, all sorts of good stuff. Find a cash flow statement prepared on the indirect method and take a look at the adjustments made to net income to arrive at operating cash flow. Those should give you a good starting point in going from accrual to cash. | |
| March 4, 2009 | |
| If you have managers who normally do this, you might want to ask them for a template. It may not have everything, but it will probably be a good start. I agree with Jerry as well. | |
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