2. What is the difference between Cash and Accrual based accounting? Accrual based accounting is for public corporations. Cash based accounting is for small businesses, The point in time in which Income and expenses are recognized on the financial statement There is no material difference between Cash and Accrual. They are interchangeable, Accrual based accounting uses a Trial Balance, Cash based accounting does not. Cash basis is used when a business does not have any debt. Accrual basis is when the business has loans or credit debt