Over the course of the year, we earned some money.

The customer pays you 200 for your services

And so your profit is 100.

So they can see where the buisness is doing well, where it's not doing well, or maybe how rescorces should be allocated

So this kind of the cash income statement,

Give a better indication of what's actually going on in the buisness, and the way I did it in the first two videos, the first column over here

Let's now account for the same series of events but instead of doing it on a cash basis

let's do it on an accrual basis.

So this right here you could view as our income statement.

Why would I want to invest in this buisness that's losing 200 a month?

And you didn't have to spend any expenses because you didn't do any accounting.

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.

So, I wanted to show you something.

Google is a company born of idealism.

Now either one of these is legititmate ways of accounting but its good to know the difference

Nice college kid. Socialist.

On the cash basis it looks like you lost money again.

Chile is socialist now.

They ended capitalism and built a socialist society.

It meant something that would connect us all together.

Franklin said, A republic, madam, if you can keep it.

And even then, what kind of socialism did they practice?

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

China, I believe, still has some of the excellent raw fundamentals mostly the social capital, the public health, the sense of egalitarianism that you don't find in India.

So both cash and Accounts Receivables are assets.

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

So, asked in that way,

The socialism that they practiced was a peculiar form of

And, in different forms, it stayed unified until the fall of Communism.

Can I pay 100 for it to you this month, and then maybe pay another 100 to you next month?

Well, that idea of biomimicry, respecting the wisdom of all species, combined with the idea of democracy and social justice, respecting the wisdom and the worth of all people, would give us a different society.

When did Democracy come into existence?

We live in a society of democracy.

Vote for us we'll establish a theocracy.

She's my accounts manager.

He abandoned socialism.

And they were not used to that in communist 2.0 Vietnam.

Now there's one thing that you're probably confused by right now well you know, how do we reconcile everything with the cash we know that over this period we got 200 in income on an accrual basis.

My job title is account manager.

Maybe as people, because especially in Israel, we're in a democracy.

So, you agree with me on oil policy?

Capitalism and then I'll get a little bit more.

It's a 40 year old company, it understands manufacturing.

And so in month 4 we earned 100, and once again, 100 went away from our cash balance, so we still have 400.

Individual freedom is the soul of democracy.