Question

Consider a healthcare organization with which you are familiar with and explain the difference between cash and accrual accounting in healthcare setting. Be sure to include a discussion of the revenue recognition and matching principles.

Answer 1

Some of the differences existing between cash and accrual accounting are

Cash accounting	Accrual accounting
Cash required	cash not required
Payment receipt available	no payment receipts
Time recorded during transactions	No timing
Revenue is generated when cash is received	Revenue is generated when earned
Nil	Expenses recorded when consumed
Cashier is required	anyone can transfer
Cannot measure performance	Measures performance of an organization
Cannot give a overall statement	can generate overall statement

The revenue is recognised during earning period in accrual accounting and when cash received in cash accounting.