Cash accounting

From Conservapedia - Reading time: 1 min

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Cash accounting is a method of accounting which is used in many small businesses. Companies that are publicly-traded or subject to government regulation, however, cannot use cash accounting; they are required to use accrual accounting.

Under cash accounting, revenues are recorded on the accounting records when payment is received under cash accounting. Similarly, expenses are recorded when payment is made. Assets and liabilities are generally not recorded; everything is treated as a revenue or expense item.