Business and Personal Finance Dictionary

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• CASH METHOD
  
  The form of accounting in which you report income in the actual year you receive it and deduct expenses in the year you pay. Most individuals use this method. Under this system, if you built a deck and billed the client in December 2004 but didn't receive the check until January 2005, it would be counted as 2005 income, not 2004.
  
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