When a company is on a cash basis accounting system what date do you use for recording Credit Card purchases – the date of the purchase or the date of payment? I had assumed the date of payment but I’ve recently read some info that hinted it might need to be recorded as the date of purchase. Unfortunately, the info was clear enough for me to confirm which date was the appropriate one to use when on the cash basis.
Hey Lynda, great question! The date that you purchase the item is what you should use to record credit card purchases. Since your credit card payments could be for less than what your outstanding balance is, you don’t want to wait until you have paid off your balance before it counts on your books.
Best of luck,
Crystalynn Shelton, CPA
315 Madison Avenue, 24th Floor
New York, NY 10017
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