Differences between Cash accounting and Accrual Accounting

Differences between

Item	Cash Accounting	Accrual Accounting
1. Basis	Cash is the basis for recognition of Income or expense. That means actual cash received or paid is the basis.	Revenue earned for income and expense incurred is the basis.  That means Cash received or paid is immaterial
2. Nature	Simple	Complex
3. Matching concept	No.  Example : Advance Rs. one Lakh received in 2018 December, for which service is not delivered in FY 2018-19.  But Rs. One lakh is accounted in Fy 2018-19 as income only, though service is not rendered.  That means Income received, but corresponding expense is not incurred in that particular year. Hence No matching concept.	Yes.  Advance Rs. one Lakh received in 2018 December, for which service is not delivered in FY 2018-19.  Here Rs. One lakh is accounted in Fy 2018-19 as Creditor/Advance income only .  If service delivers in FY 2019-20, advance income shown in 2018-19 FY is adjusted as income earned in the year FY 2019-20.  Because service delivered and income earned are matched in FY 2019-20.
4. Recognition of Revenue	Cash is received	Revenue is earned
5. Recognition of Expense	Cash is paid	Expense is incurred
6. Accuracy	Low	High

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Differences between Single Entry and Double Entry

Differences between

Item	Single Entry	Double Entry
1. Meaning	Accounting system in which only single entry requires for every financial transaction	Accounting system in which two entries requires for every financial transaction. For every debit, there is equaling credit is posted
2. Nature	Simple	Complex
3. Preferable for	Small enterprises	Big enterprises
4. Preparation of Financial Statements ( such as P & L Account and Balance Sheet)	Difficult	Easy
5. Suitable for Tax purpose	No	Yes
6. Knowledge of Book keeping	Not required	Required
7. Existing from	Since time immemorial	Since 1494 *
8. Detection of errors	Difficult	Easy

* Double entry book keeping was developed by Luca Pacioli, an Italian mathematician.  He is referred as "Father of Accounting and Book Keeping". He described book keeping along with other accounting topics in 9th chapter (150 pages) in his book  "The Summa de arithmetica"

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APPENDIX 2 EXAM - SCR 2019 QUESTION PAPERS

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APPENDIX 2 EXAM - SCR 2019 QUESTION PAPERS