According to Forbes, these changes will allow businesses with less than $ 25 million in annual sales to use the simpler cash method of accounting instead of the more complex accrual method. (rismedia.com)
Since earnings are based upon the accrual method of accounting, and cash flow is based upon the cash method of accounting, it is a direct method of how effectively a company is able to act on their accounts receivable. (financialcanadian.com)
The cash method of accounting records revenues and expenses only when payment is made. (financialcanadian.com)