Cash versus Accrual

"Matt" wrote

It's considered paid when charged.

But, it's just as practicle to deduct the expense when paid from the checking account (especially if you tend to pay the balance each month).

But the real point is to have an expense policy and to stick to it. You can't pick and choose which items to include this year, and which to deduct next.

It looks especially bad if you claim just enough charged expenses this year to bring profit to $0 and carry the others to 2006.

thanks.

matt...typically, in cash accounting the transactions are "booked" when cash actually moves....so, if you want to do cash accounting, you will book the expense when paid...either in cash, check, or whatever....in acrual accounting, you would book the expense when the items (or services) were placed "in service".....not when they were paid...

In by Paul Thomas on Fri, 23 Dec 2005 22:07:47 -0500 we perused:

Is a "practicle" a particularly practical particle?

- = - Vasos-Peter John Panagiotopoulos II, Columbia'81+, Bio$trategist BachMozart ReaganQuayle EvrytanoKastorian ---{Nothing herein constitutes advice. Everything fully disclaimed.}--- Pataki+JebBush in 2008!

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"It is paid for by the credit card company so it is booked when purchased."

yea, your right John...if you are keeping the books for the credit card company.....

Thanks to all the replies.

Matt

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