Definition of "Cash basis"

LeeAnn Rhoden real estate agent
LeeAnn Rhoden, Real Estate Agent Blanchard and Calhoun

Method of accounting in which expenses are recorded when cash is paid and revenue is recorded when cash is received. The cash basis can be used for a service business. It can only be used for a company that has inventory if there is a risky customer and uncertain collection period. See also accrual method.

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