The "cash basis" accounting method records revenues and expenses only when cash is actually received or paid. This means that income is recognized when money comes in, and expenses are recognized when money goes out. This approach is straightforward and often used by small businesses and individuals for its simplicity. In contrast to the accrual basis method, which records transactions when they are incurred regardless of cash flow, cash basis provides a clear picture of cash on hand. This method can help businesses manage their cash flow effectively, making it easier to track available funds for operations and expenses.