Accounting Systems

Systems of Accounting:
There are Basically Two systems of Accounting:
i:Cash System Of Accounting:
It is a system in which accounting entries are made only when cash is received or paid.No entry is made when
a payment or receipt is merely due.Government system of accounting is mostly on the Cash system.Certain Professional
people and small Business houses record their income on cash basis,but while recording expenses they take into account
the outstanding expenses also. in such a case,the financial statement prepared by them for determination of their income
is termed As"Receipts and Expenditure Account"
ii:Accrual System of Accounting:
it is a system in which accounting entries ar made on the basis of amounts having become due for payment or receipt.
This system recognize the fact that if a transaction  or an event has  occured; It's concequences Cannot be avoided and
therefore should be brought  into record in order to present a meaningful picture of profit earned or loss suffered
during a period and also of the financial Position of the firm concerned at the end of the a period.