what most companies use;recognize revenue when it is earned and expenses in the period incurred,without regard to the time of receipt or payment of cash (when the event
occurs, not when paid/have to pay)
Strict Cash basis
companies record revenue only when they receive cash, and the
record expenses only when they disperse cash (when they receive or month have
to pay); all about collecting revenue and paying expenses; ignores revenue and
expense recognition
main difference between the two
TIMING
compute sales
cash collected from customers +/- accts receivable