Cash Accounting

What Does Cash Accounting Mean?
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 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.

Related Terms

Accrual Accounting
Cash Basis Taxpayer
Cash Budget
More Related Terms

Related Links

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Given a good bookkeeping system, would financial accounting be necessary?

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