The cash basis is a method of accounting that records transactions when cash is received or paid out, rather than when the underlying transaction occurs. Under the cash basis, income is recorded when it is received and expenses are recorded when they are paid.

The cash basis is in contrast to the accrual basis, which records transactions when they occur, regardless of when the cash is received or paid. The accrual basis is generally considered to be more accurate and is required for most businesses, as it provides a more complete picture of a company's financial performance.

The cash basis may be used by small businesses or individuals who do not have complex financial transactions. It is simpler to use than the accrual basis, but it may not provide as accurate a representation of a business's financial position.