The cash method is more of an immediate recognition of revenue and expenses. When someone sells something for cash they will wright down what they sell and how much it was so at the end of the day they will know how much they sold and if they were paid the correct amount of money. According to Accounting Made Simple by Mike Piper, “The problem with the cash method, however, is that it doesn’t always reflect the economic reality of a situation.” 

The accrual accounting method is more based on anticipated revenue and expenses. According to Investopedia “Under this method, revenue is accounted for when it is earned. Unlike the cash method, the accrual method records revenue when a product or service is delivered to a customer with the expectation that money will be paid in the future.” This means that you track the money that you should be paid with high expectations that you will be paid in the future. 

If your starting a business now or will be in the future start with the cash method because it will be easier. 

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