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What is the difference between the cash basis of accounting and the modified accrual/cash basis of accounting?

The modified cash basis of accounting is when a company combines the cash basis of accounting and the accrual basis of accounting. The modified cash basis, sometimes referred to as the modified accrual basis of accounting (will see more in the government accounting lecture), will primarily be used for non-profit organizations as well as government organizations. Public companies cannot use this method as it is not allowed under U.S. GAAP.

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