revenue recognition

Hi there kwg2023,

It's important that all your transactions are well entered for your books to be well balanced. QuickBooks Online is a great tool able to help you keep track of sales and expenses so you can see the profit of your business. I can provide some information about the cash accounting method.

The accrual accounting method considers the revenue and expense once a transaction is invoiced, so in this method, the revenue is recorded once the invoice is created, or the expense is recorded once a bill is created. In the cash accounting method, only once those invoices and bills are paid are the revenue and expense considered.

To check which accounting method is used for your books in general, go to the Gear Icon, then Account and Settings. Select the Advanced tab, then in the first module titled Accounting, check to see if the Accounting method is set to Accrual or Cash.

To check the tax center to see if your taxes are being recorded using the Accrual or Cash method, go to Taxes, then Manage sales trax. Click on Edit Agency settings, and see if the accounting method matches the one set in Account and Settings.

If you have any other questions, feel free to reach out here.