1) All companies around the world practice cash accounting and accrual accounting. For example, a.- Cash-based accounting: Income is recorded when cash is actually received from customers, and expenses are recorded when payments are made to suppliers and employees. b.- Accrual accounting: Income and expenses are recorded when incurred. We can see that Quickbooks follows accrual-based accounting where all the earned income that is actually incurred is recorded in that accounting period. The timing of the cash flows against that invoice number does not matter in this situation. The Generally Accepted Accounting Principles Concordance Principle states that all income and expenses must be recognized in the same accounting period, therefore, it is an acceptable practice and is maintained entirely proper in accordance with GAAP. What is your opinion?

2) Quickbooks is accounting software mainly developed by Intuit to facilitate online accounting transactions like accepting business payments, managing and paying bills, payroll functions, and preparing accounting reports.

All the companies worldwide practices either cash-based accounting and accrual-based accounting.

In Cash-based accounting, the revenues are recorded when the cash is actually received from the customers, and expenses are recorded when the payments are made to the suppliers and employees.

On an Accrual basis of accounting, revenues and expenses are recorded when they are incurred.

Quickbooks follow accrual-based accounting where all the income earned, which is actually incurred, is recorded in that accounting period. The timing of the cash flows against the said invoice number does not matter in this situation.

The matching principle in Generally Accepted Accounting Principles states that all the revenues and expenses should be recognized in the same accounting period.

Therefore, It is an acceptable practice and holds totally correct according to GAAP. What is your opinion?

3) 1.- How does a business recognize when to create an invoice and when to create a sales receipt?

a.- The business creates an invoice when they sell goods on credit and create sales receipts when they sell goods for cash or receive cash on credit sales to the customer.

2.- What are the significant differences between sales receipts and invoices?

a.- The key differences between an Invoice and a sales receipt are:

- A Invoice requests for payments, whereas Sales receipts act as proof for payments.

-B If invoices are issued, then the revenue is expected to be realized in the future, and hence, they are recorded as debtors. When receipts are issued, it represents that cash is received, and hence either sale are recorded as cash sales, or debtors balance is reduced.

3 - What industries will most likely use invoices over sales receipts?

a.- Mostly, wholesale industries that sell a bulk quantity of goods to resale or future processing are likely to issue invoices, and retailers who sell goods to final customers are likely to issue receipts.

What can you add to this topic?