Cash Basis Accounting is a method of recording financial transactions where revenues and expenses are recognized only when cash is actually received or paid. This means that income is recorded when money comes in, and expenses are recorded when money goes out, providing a straightforward view of cash flow. This approach is often used by small businesses and individuals because it is simpler and easier to manage than other accounting methods, such as Accrual Accounting. However, it may not provide a complete picture of a business's financial health, as it does not account for outstanding invoices or unpaid bills.