cash basis

Definition

The bookkeeping practice of recording sales and expenses only when cash is actually received or paid out, as opposed to accrual basis. Generally cash basis bookkeeping is simpler than accrual basis bookkeeping, but makes securing financing more difficult. also called cash method of accounting.

Use cash basis in a sentence

You should try and figure out a way to use cash basis so that you know how everything is going for you.

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When Mr. Stevens purchases a used car from Lenny with hundred-dollar bills, he wrote it down in his cash basis ledger, but his bookkeeping was far from completed.

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We made a new acquisition and had to determine the cash basis revenue since only about half the customers had multi-month contracts. The rest paid month-to-month.

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