Cash accounting is about to get more use.
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A number of entrepreneurs will find good news in a recentlyissued IRS procedure allowing certain businesses with grossreceipts of up to $10 million to use the cash method of accountingfor income and expenses rather than the accrual method.
When companies use the cash method, income is taxable whenreceived, and expenses are deductible when paid. With the accrualmethod, transactions are taxable or deductible when incurred.
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