cash basis
Money-when-exchanged method
Cash basis is an accounting method that records income when payment is received and expenses when payment is made, regardless of when the transaction occurred.
Contrasts with accrual basis, which records transactions when they happen: Small businesses often use the cash basis for simplicity.
Also called cash accounting.
Recording financial transactions systematically
- financial statementsFormal records of transactions
- income statementPeriodic profit-loss report
- ledgerFinancial record book
- journal entriesRecorded personal observations
fiscal period · receipts · payments · inflow · outflow · transactions · profit · loss
Single owner of business
- freelancerSelf-employed service provider
- self-employedWorking independently, not hired
- independent contractorSelf-employed person hired temporarily
- small businessModest independent commercial venture
startup · side hustle · microbusiness · invoices · billing · budgeting · financials · payables
Earnings subject to taxation
- deductionsConclusions from reasoning
- tax liabilityMoney owed to government
- tax yearAnnual accounting period
- estimated taxesPrepaid government obligations
Schedule C · Form 1040 · tax bracket · IRS · tax filing · quarterly taxes · tax return · income taxes
Clear and uncomplicated
- uncomplicatedEasy to understand
- elementaryOf first principles
- directUndeviating or to guide
- clear-cutPlainly evident, unmistakable
practical · accessible · intuitive · no-frills · transparent · understandable · tangible · immediate
bookkeeping
Recording financial transactions systematically
- financial statementsFormal records of transactions
- income statementPeriodic profit-loss report
- ledgerFinancial record book
journal entries · fiscal period · receipts · payments · inflow · outflow · transactions · profit · loss · single-entry
sole proprietor
Single owner of business
- freelancerSelf-employed service provider
- self-employedWorking independently, not hired
- independent contractorSelf-employed person hired temporarily
small business · startup · side hustle · microbusiness · invoices · billing · budgeting · financials · payables · receivables
taxable income
Earnings subject to taxation
- deductionsConclusions from reasoning
- tax liabilityMoney owed to government
- tax yearAnnual accounting period
estimated taxes · Schedule C · Form 1040 · tax bracket · IRS · tax filing · quarterly taxes · tax return · income taxes · tax compliance
straightforward
Clear and uncomplicated
- uncomplicatedEasy to understand
- elementaryOf first principles
- directUndeviating or to guide
clear-cut · practical · accessible · intuitive · no-frills · transparent · understandable · tangible · immediate · real-time