let's do the accrual accounting income statement.

This is the cash basis of accounting and this is the accrual, and let's just look at the income statement

So I'm gonna start of, we're gonna focus on month 2 and what I've done is I've rewritten some of this accrual income statement down here so it really looks like a statement so this right here is the income statement for month 2 on an accrual basis.

In the next video, I'll try to reconcile what the Accrual income statement is telling us and the actual cash.

let's do it on an accrual basis.

The basic income is a different type of income.

It plots income, average income in China as a percentage of average income in the United States.

The basic income extends into the existing income, while the level of total income does not change.

ridiculed, deprived of jobs, income,

To see the difference between cash accounting and accrual accounting

Independent of the level of their income.

So low income here, high income there.

This is 350,000 of net income.

Investment income.

So at least for month 1, the cash basis and the accrual basis of accounting

So let's se which of these two methods of accouting, the cash method and the accrual method

And what I'll do, I'll do the accrual accounting right here

We pay an income tax at varying rates according to the size of income.

Make the best of your small income.

Never spend in excess of your income.

living on 44 percent of the income.

I get this type of income stream.

Part of the income for his farm.

With a basic income, income becomes a civil right.

Non operating income.

The Basic Income

Income went down.

Second, his income.

So in the accrual basis of accounting, you would say that you earned 400 of revenue in this month.

We think there's an income problem, so we create new ways of farming that increase income.

But when you look at the Accrual basis it actually reflected what happened.

She spends most of her income on books.

He has a monthly income of 2,000 dollars.

He made the best of his small income.

So this kind of the cash income statement,

You're left with 500,000 of pre tax income.

I added an extra 10,000 of income here.

It's the top line of the income statement.

This is the income distribution of China, 1970.

Today almost everyone has some form of income.

Of course, a basic income can be exploited.

But housing is about 43 of disposable income.

So hopefully this gives you a idea of why accrual gives a better picture of what's happening in a buisness.

'A basic income is an income which is granted unconditionally, to every member of a political community.'

An income tax is levied on any income that exceeds deductions.