Accounting method cash is a term used to describe the type of accounting system that focuses primarily on recording the effects of business transactions and other events as they occur. This method requires businesses to record income and expenses when they are actually received or paid rather than when earned or incurred. The main benefit of this method of accounting is it more accurately reflects the true financial state of a business in any given period, making it easier for users of the financial statements to assess the performance of the company. In contrast, accrual-based accounting seeks to match all revenues and expenses in the same period regardless of when cash is actually paid or received.