What is cruel accounting?

What is cruel accounting?There are two methods of maintaining accounts of a business enterprise, namely cash method and accrual method. In cash method, revenues / expenses are taken into account only when hard cash has been received / paid. In accrual method of accounting, revenues are recognized the moment goods or services are provided. Both revenue and expenses are recorded, regardless of income or outgo in terms of cash. The accrual method provides better matching of income and expenditure than cash method, but is complicated, error-prone and costly. No wonder people call it cruel accounting.

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