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Cash Accounting

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Definition of 'Cash Accounting'

An accounting method where receipts are recorded during the period they are received, and the expenses in the period in which they are actually paid.
Investopedia Says

Investopedia explains 'Cash Accounting'

Basically, when the cash is received for a sale, it is recorded in the accounting books as a sale. This is in contrast with accrual accounting, where revenue and expenses are recorded when they are incurred.

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