Mercantile and cash system

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Amit (Querist)
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21 March 2009 Who can adept cash or Mercantile system of accounting ?

What is the major difference in cash and mercanile system of accounting ?

Can a company follow cash accounting system ?

please also tell when it can follow cash accounting and mercantile system of accounting ?

Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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25 March 2009 professionals can adopt cash or mercantile system of accounting

in cash system cash receipts and payments on actual basis is to be accounted for whereas in mercantile system all income and exps. pertaining to financial year is to be accounted for whether reced or not and whether paid or not.

Company has to follow mercantile system of accounting only.