A system of accounting that records revenue and expenditures when cash is received or paid.

Revenue is recorded when received in cash, and expenses are recorded in the period in which cash payment is made.

The recognition and recording of income and expenses only when the cash (income) is actually received and the bills are actually paid (expense).

An accounting method under which income is reported when actually received, and expenses are deducted when paid.

A system of accounting in which revenues are recognized when cash is received and expenses are recognized as disbursements are made. Contrast with Accrual Basis of Accounting.

An accounting system that recognizes revenues and expenses only when cash is exchanged (such as when an invoice is paid). The system ignores transactions if they do not involve cash, such as expenses that have been billed but are not yet due.

An accounting method wherein revenues are recognized when cash is received and expenses are recognized when paid. This method is inferior to the accrual basis of accounting where revenues are recognized when they are earned and expenses are matched to revenues or the accounting period when they are incurred (rather than paid). The cash basis of accounting is usually followed by individuals and small companies, but is not in compliance with accounting's matching principle. To Top