The
cash method of accounting, also known as
cash-basis accounting,
cash receipts and disbursements method of accounting or
cash accounting (the
EU VAT directive vocabulary Article 226) records revenue when cash is received, and expenses when they are paid in cash. As a
basis of accounting, this is in contrast to the alternative
accrual method which records income items when they are
earned and records deductions when expenses are
incurred regardless of the flow of cash.