Cash Basis Financial Statements are financial statements that are prepared using cash transactions, as opposed to accrual accounting. This method recognizes and records income and expenses only when payment is received or made. This means that the financial statements will only reflect revenues when cash is received from customers, and expenses once cash is paid out. This can provide a clearer view of the company’s actual financial performance. Thus, Cash Basis Financial Statements are an ideal tool for business owners who want an immediate and accurate picture of their financial position.