Andrew Lokenauth on Nostr: 2/ Accrual Accounting Most people think of accounting as balancing a ...

2/ Accrual Accounting

Most people think of accounting as balancing a checkbook—counting cash in and cash out (this is called Cash Accounting)

But real businesses use Accrual Accounting

Why?

Because it’s a more accurate way to measure actual profit by matching revenues and expenses in the same period

Here's a simple way to think about it: