Cash accounting is used by most individuals for their personal accounting.
The accrual method recognizes credits and debits, regardless of whether or not a monetary transaction has been made.
If you switch from cash to accrual accounting, you will need to receive permission from the IRS.
Cash and accrual accounting are financial reporting methods that share a similar function of recording sales and purchases. However, when it comes to how they operate, their processes differ in when and how you record transactions in your accounting software.