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    #1

    Accrual to Cash

    Do you need permission from IRS if a client wants to switch from accrual to cash basis.

    This client is a liquor store with gross sale of $900,000 a year. Previous accountant was filing tax on an accrual basis!

    Thanks!
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    #2
    Why change?

    What would you gain? Does the liquor store have receivables?

    Comment

      #3
      Originally posted by veritas View Post
      What would you gain? Does the liquor store have receivables?
      Previous accountant did show receivables. How do you tarck that in a liquor store. Do I really need to track deposits made on Dec 31st but bank reported these deposits in Jan?

      Thanks.

      Comment

        #4
        Your sales revenue

        should match the cash register or POS system each day. This would include cash and in house accounts the liquor store carries. Business done on 12-31-XX is included in the year the sales were generated not when it is deposited.

        I personally would only do a retail business with an inventory on the accrual basis. Cash basis is messed up.

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