What is cash basis of accounting in SAP SRD-FIN-COR - FIN-Cost and Revenue?

SAP Term: cash basis of accounting

• Component: SRD-FIN-COR

• Component Name: FIN-Cost and Revenue

• Description: Method of recognizing revenue and expense when cash is received or disbursed rather than when earned or incurred. The alternative is accrual accounting, which is used by corporates in general.

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• Key Concepts: 
  Cash basis of accounting is an accounting method that records transactions only when cash is exchanged. This means that income and expenses are only recorded when money is received or paid out, rather than when the transaction is initiated. This method of accounting is often used by small businesses and individuals who do not have the resources to track all of their transactions in real-time. 
  
  How to use it: 
  In SAP, cash basis of accounting is used in the SRD-FIN-COR FIN-Cost and Revenue Accounting component. This component allows users to track their income and expenses on a cash basis, as well as other methods such as accrual basis. The component also provides users with the ability to generate reports and analyze their financial data. 
  
  Tips & Tricks: 
  When using the cash basis of accounting in SAP, it is important to keep track of all transactions in order to ensure accuracy. Additionally, it is important to ensure that all transactions are recorded in the correct period in order to maintain accurate financial records. 
  
  Related Information: 
  The cash basis of accounting is just one of many methods used in SAP for tracking financial data. Other methods include accrual basis, which records transactions when they are initiated rather than when cash is exchanged, and periodic basis, which records transactions at regular intervals.