Accounting bases are the different methods used to recognize income and expenses in financial records.

The main accounting bases are:

Cash Basis

Income is recorded when cash is received

Expenses are recorded when cash is paid

Accrual Basis

Income is recorded when it is earned

Expenses are recorded when they are incurred
(even if cash is not yet received or paid)

Most companies use the accrual basis because it shows a more accurate financial position.

In simple terms, accounting bases are the rules that decide when income and expenses should be recorded.