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Old 01-02-2002, 07:18 PM
bruces bruces is offline
LawnSite Senior Member
 
Join Date: Jun 2001
Location: Independence, MO
Posts: 648
Quote:
Originally posted by HBFOXJr
How can a charge on a credit card, using cash accounting, be counted when it is charged? No funds have been dispersed. No cash has moved. You've only created a liability just as if a vendor gave you credit on his own.

Charged slips only count if you are on accrual basis.

I'm missing how invoices made in the new year can be counted in the previous year on any accounting basis.
Mr. Fox,

The IRS regards credit card charges (payments made by Visa, MC, AMEX, etc. to be the same as cash payments. In effect, you are taking out a loan and paying a bill.

As a side note, this is also a valid way of making charitable contributions.

Maybe the difference between a charge card and open accounts payable (such as an open account at your supplier) is the fact that a third party is involved.

I do know that it is a valid "cash" payment for tax purposes.
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