An accounting method where income is reported when it is received (as opposed to when it is earned) and expenses are reported when they are paid (as opposed to when they are incurred).
One of the two most common methods of accounting, the other being the accrual method defined elsewhere in this glossary. Under the cash method of accounting, income is reported in the tax year actually or constructively received and expenses are deducted in the tax year paid.
An accounting method that uses the amount actually paid or received in determining the income or loss of the company.
If you use the cash method, you record income only when you receive cash from your customers. You record an expense only when you write the check to the vendor.
Common method of accounting wherein income is reported in the year it is received and expenses are deducted in the year they were paid.
With this method, you report income in the year it is actually received. Similarly, expenses are deducted in the year they are actually paid. Farmers, fishers, and certain salespeople who work on commission may use the cash method.
A system, used especially in computing income tax, in which income is not credited until it is actually or constructively received and expenses are not charged until they have been paid; to be distinguished from the accrual method, in which income is credited when the legal right to the income occurs and expenses are charged when the legal liability becomes enforceable.
A method of accounting in which income is not recognized until it is received and expenses are not recognized until they are paid. (See Accrual Method of Accounting.)
An accounting method under which income is subject to tax when actually received and deductions are allowed when actually paid.
See cash basis of accounting. To Top
