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Last Updated: 12/6/2013

Accounting Methods – Cash Basis or Accrual Basis

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There are two main accounting methods: cash basis and accrual basis. Each method is defined by how your business tracks income (or receipts) and expenses, as briefly described below:

  • Cash Basis –  You report income/receipts and expenses based on when you receive or make payments.
  • Accrual Basis –  You report report income/receipts and expenses based on when you earn or incur them.
Note:  If you are unsure which method your business uses, you may want to consult a tax or legal professional.

 Editing your Accounting Method

If you need to add an accounting method or change your accouting method:

  1. Access your Sales & Use Tax account.
  2. Select the Account Information tab.
  3. Click the Edit link for Accounting Method.
  4. Select your accounting method and complete the remaining steps as directed.