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Small And Medium-Sized Entities Between The Accrual Basis Of Accounting And Cash Accounting


  • Mihai Ristea

    () (Academy of Economic Studies Bucharest)

  • Alexandra Doroş

    () (Academy of Economic Studies Bucharest)

  • Corina Ioanăş

    () (Academy of Economic Studies Bucharest)

  • Dan Dragos Morega

    (PhD Student at the Romanian Academy in Bucharest)


Should revenue be recognized when generated or when ultimately collected by a company? Should expenses be recognized when incurred or when finally paid? The answers to these questions vary and are dependent or whether a entities employs the cash or accrual basis of accounting. The cash basis of accounting focuses on the cash flows connected with revenue and expenses. But the cash basis of accounting is criticized as not being in accord with economic reality. The accrual basis of accounting overcomes the chief limitation of the cash basis – a possible mismatch of revenue and expenses.

Suggested Citation

  • Mihai Ristea & Alexandra Doroş & Corina Ioanăş & Dan Dragos Morega, 2010. "Small And Medium-Sized Entities Between The Accrual Basis Of Accounting And Cash Accounting," Romanian Economic Business Review, Romanian-American University, vol. 5(4), pages 208-220, december.
  • Handle: RePEc:rau:journl:v:5:y:2010:i:4:p:208-220

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    References listed on IDEAS

    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
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