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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, [[revenue]]s are recorded on the accounting records when payment is received under [[cash accounting]]. Similarly, [[expense]]s and [[liability|liabilities]] are recorded when payment is made.
A hybrid form of cash accounting, called '''modified cash accounting''', is used in many cases. It generally works the same as cash accounting except for when a capital asset is purchased; in that case, the asset cannot be charged in the year of purchase but is subject to [[depreciation]].
[[Category:Accounting]]
Under cash accounting, [[revenue]]s are recorded on the accounting records when payment is received under [[cash accounting]]. Similarly, [[expense]]s and [[liability|liabilities]] are recorded when payment is made.
A hybrid form of cash accounting, called '''modified cash accounting''', is used in many cases. It generally works the same as cash accounting except for when a capital asset is purchased; in that case, the asset cannot be charged in the year of purchase but is subject to [[depreciation]].
[[Category:Accounting]]