what is cash accounting 
cash accounting is an accounting method where payment receipts are recorded during the period in which they are received and expenses are recorded in the period in which they are actually paid in other words revenues and expenses are recorded when cash is received and paid respectively cash accounting is also called cash basis accounting and may be contrasted with accrual accounting which recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is actually received or paid understanding cash accountingcash accounting is one of two forms of accounting the other is accrual accounting where revenue and expenses are recorded when they are incurred small businesses often use cash accounting because it is simpler and more straightforward and it provides a clear picture of how much money the business actually has on hand corporations however are required to use accrual accounting under generally accepted accounting principles gaap 