This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.

In this episode you will learn:

- The hybrid method is a combination of cash and accrual accounting permitted by the IRS.

- A business with inventory must use the accrual method for all purchases and sales of that merchandise.

- Service-based income and general operating expenses can often be accounted for using the cash method under a hybrid system.

- A common exam trap involves small businesses with inventory incorrectly attempting to use the pure cash method for all transactions.

- Any accounting method chosen, including hybrid, must be used consistently and must clearly reflect income to be valid.

For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep