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The accounting environment
9.5 Cash and profit
Cash
Cash may be regarded as the value of notes and coins, including the bank balance,
an organisation have access to at any point in time. Consequently, cash transactions
are accounted for based upon the date of receipt and payment of cash.
Profit
Profit is the difference between sales revenue less expenses incurred during an
accounting period, which is accounted for on an accruals basis. In effect, this means
that transactions are accounted for on the date that they are entered into, which may
not be the same as the date of receipt or payment of cash.
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