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Accounting Method Definition
For each enterprise transaction, you document a minimum of two opposite and equal entries. Debits and credit improve or lower the accounts in your books, relying on the account.
When must a business use the accrual method?
The accrual method is required if the entity fails both the $1 million and the material income-producing factor tests. The accrual method is required if the company has more than $5 million in average sales. The exhibit below includes a flow chart to help small businesses select the proper accounting method. Accrued liabilities come up […]
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