Series 79: Cash-basis Accounting

Taken from our FINRA Investment Banking Exam

Definition of the term Cash-basis Accounting...

an accounting method in which revenues and expenses are “recognized” (treated as real for accounting purposes) only when the company actually receives or pays out cash, rather than when the revenue is earned or the expense incurred. Compare with accrual-basis accounting.

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Solomon Exam Prep Study Materials for the Series 79
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