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It will also add expenses and income from the previous year that were paid or received in the current year.

In the simplest explanation, QuickBooks makes Accrual to Cash conversions by removing unpaid expenses and unreceived income from your reports. This is why it is important that you understand how QuickBooks makes their conversions. It is important to note that the conversion can sometimes lead to inaccurate numbers that can be somewhat troubling. It also doesn’t mean that QuickBooks stores two different sets of books instead, to help you with keeping a cash basis financial statement, QuickBooks does its best to make the Accrual to Cash Basis conversion. This means that QuickBooks will allow you to use accrual basis reports for management information throughout the year and you can also use cash basis reports when preparing taxes.

One of the very best features in QuickBooks is the fact that it doesn’t force you to use just the Cash or Accrual Basis. We will use this article to discuss using cash basis reports in QuickBooks.