Restaurants can use either the cash or accrual accounting method, though the choice often depends on the size and complexity of the business.
Smaller restaurants or those just starting out may prefer cash accounting due to its simplicity and straightforwardness, as it records transactions only when cash changes hands.
Larger restaurants, especially those with more complex operations, inventory management, and credit card transactions, often opt for accrual accounting. This method records revenues and expenses when they are earned or incurred, regardless of when the cash transaction occurs, providing a more accurate financial picture over time.