Accounting Method
/ˈæk.aʊn.tɪŋ ˈmɛθ.əd/
Definitions
- (n.) The set of principles and procedures used by a business or individual to record financial transactions and prepare financial statements.
The company changed its accounting method from cash basis to accrual basis for tax purposes.
- (n.) A tax reporting system prescribed by law or regulation to determine the timing of income and expense recognition for tax purposes.
The IRS allows taxpayers to choose an accounting method that aligns with their business operations.
Forms
- accounting method
- accounting methods
Related terms
See also
Commentary
Selection of an accounting method affects legal tax obligations and compliance, making precise definition critical in tax law and financial reporting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.