Proprietary concern - Whether Cash Basis or Accrual

This query is : Resolved 

19 May 2008 Please guide me whether it is compulsory for proprietary concern to maintain their accounts on Cash basis ?

Thanks,
Abhishek Jain

19 May 2008 No..u Can follow accrual basis which is more logical...

19 May 2008
No.
Proprietor may choose to use Accrual basis for accounting.
Infact, Accrual basis is more logical to use.


19 May 2008 THERE IS NO COMPULSION ABOUT FOLLOWING EITHER CASH OR ACCRUAL SYSTEM -ON ANY KIND OF INCOME TAX ASSESSEE.
ONE MAY CHOOSE AS IT SUITS TO THE PARTICULAR ASSESSEE.
ACCRUAL SYSTEM IS BETTER AS IT IS FLEXIBLE AND MORE LOGICAL AND SUITS A TYPICAL BUSINESS UNIT IRRESPECTIVE OF THE FACT THAT THE BUSINESS UNIT IS BEING PROPRIETARY,FIRM/CO.
R.V.RAO



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