Cash method of accounting

Under cash method of accounting, you report income in the fiscal period you receive it and deduct expenses in the fiscal period you pay them.

Compared to accrual method of accounting, cash method is simpler. 

In most cases, you have to use accrual method to report your business income for income tax purpose. However, under certain circumstances, for example, if you are a self-employed commission salesperson, you can use cash method.