Some not-for-profit organizations use a “modified cash basis” system of accounting. On this basis of accounting, certain transactions will be recorded on an accrual basis and other transactions on a cash basis. Usually, on a modified cash basis all unpaid bills will be recorded on an accrual basis but uncollected income on a cash basis. However, there are many different variations. ...

One practical way to avoid the complexities of accrual basis accounting, and still have meaningful financial statements on an annual or semiannual basis, is to keep the books on a cash basis but make the necessary adjustments on worksheets to record the accruals for statement purposes. These ...

In many instances, the cash basis of accounting just does not present fully enough the financial picture of the organization. The accrual basis of accounting becomes the more appropriate basis when the organization has substantial unpaid bills or uncollected income at the end of each period and these amounts vary from period to period. If the cash basis were used, the ...

The authors believe that, even in cash-basis statements, certain disclosures should be made to fully inform readers of matters affecting the financial situation of the organization. These include information about, at least, the following (to the extent applicable to the organization). (After each item is shown the source, in GAAP, of the requirement.) ...

For organizations that choose to present their financial statements on the cash basis, a question often arises as to what, if any, note and other disclosures should be made in the financial statements. Generally accepted accounting principles require many different disclosures in accrual-basis statements, but are mostly silent about the requirement to make such ...