What does CBO mean in GENERAL

CBO stands for Cash Basis Only and refers to accounting methods that only consider cash transactions when recording income and expenses.

If you use CBO, you will not account for accounts receivable, payable or any related credit or debt when recording your income and expenses. You will only count actual cash received or spent when keeping track of your finances.

Yes, many businesses choose to use CBO as an acceptable way to keep track of their income and expenditures. However, it is important to note that some businesses may be required to conform with specific tax regulations that mandate different methods such as accrual basis accounting.

One advantage of using CBO is that it can give a realistic picture of how much actual cash is available at any given time, which can be helpful in making financial decisions like budgeting or investing money wisely. Additionally, it can also simplify the process of bookkeeping since there are no accounts receivable/payable balances to track or reconcile on an ongoing basis.

One potential disadvantage of using CBO is that it doesn't provide an accurate picture of the company's true financial health since other items such as debt liabilities aren't taken into account when calculating income and expenses. Moreover, short-term cash flow issues may go unnoticed if all transactions are not tracked carefully when using this method.