Master the fundamentals of accounting with these Class 11 Accountancy Chapter 4 Bases of Accounting Notes, prepared according to the latest CBSE and NCERT syllabus. These comprehensive notes explain the two major accounting systems—Cash Basis of Accounting and Accrual (Mercantile) Basis of Accounting—in a simple, concept-focused, and exam-oriented manner. 
Understanding the basis on which accounting transactions are recorded is essential for determining the correct profit or loss of a business. This chapter helps students learn when income and expenses should be recognized, how accounting records are maintained under different systems, and why accrual accounting is widely accepted in modern business practices.
The notes cover the meaning, features, advantages, disadvantages, and practical applications of both Cash Basis and Accrual Basis of Accounting. Students will also learn important concepts such as Revenue Recognition Principle, Matching Principle, Outstanding Expenses, Prepaid Expenses, Accrued Income, and Income Received in Advance. These adjustments are explained with practical examples to improve conceptual clarity and exam performance. 
A detailed comparison between Cash Basis and Accrual Basis is included, helping students understand their differences in terms of transaction recording, profit determination, adjustments, reliability, legal recognition, and suitability. This comparison is frequently asked in CBSE examinations and forms an important part of revision. 
These Class 11 Bases of Accounting Notes are highly useful for school examinations, periodic tests, annual exams, and CUET Commerce preparation. The content is designed to strengthen conceptual understanding while making revision quick and efficient.
Topics Covered in Chapter 4 Bases of Accounting
Introduction to Bases of Accounting
Cash Basis of Accounting
Advantages of Cash Basis
Disadvantages of Cash Basis
Accrual (Mercantile) Basis of Accounting
Revenue Recognition Principle
Matching Principle
Outstanding Expenses
Prepaid Expenses
Accrued Income
Income Received in Advance
Profit Determination under Cash Basis
Profit Determination under Accrual Basis
Complete Comparison of Cash Basis vs Accrual Basis
Popular Student Searches Covered
Class 11 Bases of Accounting Notes
Chapter 4 Accountancy Notes PDF
Cash Basis of Accounting Notes
Accrual Basis of Accounting Notes
Difference Between Cash Basis and Accrual Basis
Class 11 Accountancy Chapter 4 Summary
CBSE Bases of Accounting Notes
NCERT Accountancy Chapter 4 Notes
Matching Principle Notes Class 11
Outstanding Expenses and Prepaid Expenses Notes
Quick Student FAQs Covered in These Notes
What is Cash Basis of Accounting?
What is Accrual Basis of Accounting?
What is the difference between Cash Basis and Accrual Basis?
Why is Accrual Accounting preferred?
What are Outstanding Expenses?
What are Prepaid Expenses?
What is Accrued Income?
What is Income Received in Advance?
What is the Matching Principle?
Which basis of accounting is mandatory for companies?
Whether you are preparing for CBSE exams, school assessments, or CUET Commerce, these notes provide a clear and structured understanding of Chapter 4 Bases of Accounting.
 
FAQ Section
Q1. What are Bases of Accounting?
Bases of Accounting refer to the methods used for recording income and expenses in accounting. The two main bases are Cash Basis and Accrual Basis of Accounting.
Q2. What is Cash Basis of Accounting?
Under Cash Basis, income is recorded only when cash is received and expenses are recorded only when cash is paid. 
Q3. What is Accrual Basis of Accounting?
Under Accrual Basis, income is recorded when earned and expenses are recorded when incurred, regardless of cash receipt or payment. 
Q4. Which basis of accounting is accepted under the Companies Act, 2013?
Accrual Basis of Accounting is recognized and mandatory for companies under the Companies Act, 2013. 
Q5. What is the Matching Principle?
The Matching Principle states that expenses incurred to earn revenue should be recorded in the same accounting period as the related revenue. 
Q6. What are Outstanding Expenses?
Outstanding Expenses are expenses incurred during the current accounting period but not yet paid by the end of that period.
Q7. What are Prepaid Expenses?
Prepaid Expenses are expenses paid in advance for benefits that will be received in future accounting periods.
Q8. What is Accrued Income?
Accrued Income is income earned during the current accounting period but not yet received in cash.
Q9. What is Income Received in Advance?
Income Received in Advance refers to money received before the related goods or services have been provided.
Q10. Is this chapter important for CBSE and CUET?
Yes. Bases of Accounting is a foundational chapter that is frequently tested in CBSE school exams and Commerce entrance examinations.