Question

why cash basis does not distinguish between cash receipts and revenue receipts?

Answer 1

Dear Student

In cash basis of accounting, accounting is done on the basis of receipts. Receipts means inflow of funds. Whenever there is inflow of funds that is to be recorded in the books of accounts. This is the reason cash basis does not distinguish between cash receipts and revenue receipts as accounting is based upon inflow of funds.

Regards