Accrual Method Checkpoint HSM/260 Essay

In a nonprofit physical composition it is primal to brand name sure we atomic number 18 utilizing the best accounting system for our organization. Organizations that are non-profit are expected to provide financial statements that are based upon the assemblage method of accounting. The accumulation method of accounting differs from hard currency basis accounting. In the accrual method, income is recognized when services are rendered (Kokemuller, 2013).The accrual method focuses on save revenue and expenses when the transaction occurs. Cash basis of accounting lands income as notes is accredited. 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 accrual system revenue does not extend to cash. Expenses and revenue in an accrual system is based on the period frame in which they were earned. The ca sh basis accounting is based upon the factual payment. Revenue on an accrual system is not related to the cash basis system as cash accounts are.The statement of cash come in the financial management of a human services organization is very important. This statement provides a financial record of the cash received and spent within a specific time period, for example on a yearly quarterly basis. The non-profit and human services organizations are unbroken informed by the statement of cash flow and how finances are managed and disbursed.In the financial management of a nonprofit organization it is important to understand the difference between accrual and cash basis methods of accounting. The accrual method is used most often in nonprofit organizations because it demonstrates the correlation between costs and income the most precisely.Reference Page1. Kokemuller, N. (June, 2013). Does Revenue peer Cash In An Accrual System? Retrieved from http//smallbusiness.chron.com/revenue-equ al-cash-accrual- system-68175.html