Cash to Accrual Conversion Calculator

Smaller businesses often use the cash basis of accounting which recognizes revenue when cash is received and expenses when cash is paid. There are however times when financial statements need to be prepared using the accruals basis of accounting, and for those situations this cash to accrual conversion calculator can be used to help convert between the two accounting methods.

Further details of the cash to accrual method change can be found in our cash to accrual conversion tutorial.

Using the Cash to Accrual Conversion Calculator

This cash to accrual conversion calculator can be used to convert cash receipts and payments information found in a cash based accounting system, to revenue, expenses, purchases, and cost of goods sold information used to prepare financial statements in an accruals based accounting system.

Instructions

The Excel cash to accrual conversion calculator, available for download below, is split into four independent sections to deal with revenue, expenses, purchases, and cost of goods sold calculations, and is used as follows.

cash to accrual conversion calculator v 1.01
Cash to Accrual Conversion Calculator Preview

Section 1 – Revenue

This section of the calculator is used to convert cash receipts to revenue earned by adjusting for movements on accounts receivable, unearned revenue, and accounts receivables written off.

Step 1
Enter the ending accounts receivable balance. This adds revenue which has not yet been received.

Step 2
Enter the beginning accounts receivable. This deducts revenue relating to the previous period.

Step 3
Enter the beginning unearned revenue balance. This adds revenue received in the previous period but relating to the current period.

Step 4
Enter the ending unearned revenue balance. This deducts revenue received in the current period but relating to a future period and therefore not yet earned.

Step 5
Enter the accounts receivable written off. This adds back a reduction in the ending accounts receivable balance caused by non-cash write offs.

The cash to accrual conversion calculator works out the revenue for the period on an accruals basis.

Section 2 – Expenses

This section of the cash to accrual conversion calculator is used to convert cash payments to expenses incurred by adjusting for movements on accrued expenses payable, and prepayments.

Step 1
Enter the ending accrued expenses payable balance. The adds expenses which have not yet been paid.

Step 2
Enter the beginning accrued expenses payable. This deducts expenses relating to the previous period.

Step 3
Enter the beginning prepayments balance. This adds expenses which were paid in the previous period but relate to the current period.

Step 4
Enter the ending prepayments balance. This deducts expenses which were paid in the current period but relate to a future period and have not yet been incurred.

The cash to accrual conversion calculator works out the expenses incurred for the period on an accruals basis.

Section 3 – Purchases of Inventory

This section of the calculator is used to convert inventory cash payments to purchases by adjusting for movements on accounts payable.

Step 1
Enter the ending accounts payable balance. This adds purchases which are currently unpaid.

Step 2
Enter the beginning accounts payable. This deducts purchases relating to the previous period.

The cash to accrual conversion calculator works out the inventory purchases for the period on an accruals basis.

Section 4 – Cost of Goods Sold

This section of the calculator is used to convert cash payments for inventory to cost of goods sold for the period by adjusting for movements on accounts payable and inventory.

Step 1
Enter the ending accounts payable balance. This adds purchases which have not been paid for at the end of the accounting period.

Step 2
Enter the beginning accounts payable. This deducts purchases relating to the previous period.

Step 3
Enter the beginning inventory balance. The adds inventory sold during the current accounting period.

Step 4
Enter the ending inventory balance. This deducts inventory not sold during the period.

The cash to accrual conversion calculator works out the cost of goods sold for the period on an accruals basis.

Cash to Accrual Conversion Calculator Download

The cash to accrual conversion worksheet is available for download in Excel format by following the link below.

The cash to accrual conversion calculator is one of many financial calculators used in bookkeeping and accounting, discover another at the links below.

Notes and major health warnings
Users use this cash to accrual conversion template at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of a cash to accrual conversion worksheet that you might use. It is a purely illustrative cash to accrual conversion tool. This is not intended to reflect general standards or targets for any particular company or sector. If you do spot a mistake in the cash to accrual conversion excel worksheet, please let us know and we will try to fix it.
Cash to Accrual Conversion Calculator May 9th, 2017Team

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