Accounting methods refer to the process of recognizing different types of transactions and events in order to properly record them into your company’s financial statements. The two most popular accounting methods are cash-basis and accrual-basis accounting. Cash-basis accounting is where income and expenses are only recorded when an actual payment or receipt of money is made, while accrual-basis accounting records all transactions as soon as they are incurred, regardless of when the money actually changes hands. By understanding these two basic accounting methods, business owners can better manage their finances and ensure accurate bookkeeping.