# Convert cash-basis books to accrual basis

Identifies and calculates the adjustments to move a set of cash-basis financials to accrual, with entries and a bridge.

- Topic: Finance & Accounting
- Framework: Few-Shot
- Level: Standard
- Tags: Finance, Fill-in Template
- Source: https://www.thinkwithprompt.com/prompts/convert-cash-basis-books-to-accrual-basis

## Prompt

```text
Help me convert a set of cash-basis financial statements to accrual basis.

**Why we're converting:** [e.g. "lender wants GAAP-basis statements", "investor due diligence", "monthly management reporting"]
**Period:** [DATES, plus opening date]
**Cash-basis P&L and balance sheet:** [PASTE]
**Unpaid customer invoices at start and end of period:** [AMOUNTS or AR aging]
**Unpaid bills at start and end:** [AMOUNTS or AP aging]
**Other items:** [prepaid expenses, accrued payroll and bonuses, customer deposits/deferred revenue, inventory, accrued interest, depreciation if not booked]

Steps:
1. For each item, calculate the opening and closing balance and the effect on the period's income (e.g. revenue + closing AR - opening AR).
2. Draft the adjusting entries, including the opening equity adjustment.
3. Build a bridge from cash-basis net income to accrual net income, item by item.
4. Flag items where I haven't given enough data, marked [NEED BALANCE].

Return:
1. An adjustments table: Item | Opening | Closing | P&L effect | Entry.
2. The cash-to-accrual net income bridge.
3. Adjusted P&L and balance sheet (only if all inputs are provided).
4. A short note on whether to keep accrual books going forward and what that requires monthly.

Note that tax reporting basis may differ from book basis - mark any tax implication as [TAX PREPARER TO CONFIRM].
```

## What to fill in

- DATES, plus opening date
- PASTE
- AMOUNTS or AR aging
- AMOUNTS or AP aging
- NEED BALANCE
- TAX PREPARER TO CONFIRM

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