Accrual basis: accrual basis refers to all income and expenses that should belong to the current period, regardless of whether the money is received or paid, it is treated as income and expenses of the current period; On the contrary, any income and expenses that do not belong to this period, even the money received or paid in this period, should not be treated as income and expenses in this period.

Cash basis, also known as cash basis or paid-in cash basis, records the realization of income and the occurrence of expenses on the basis of cash receipt and payment.

Accrual basis and cash basis have different recognition principles for current income and expenses; For example, in terms of income, the accrual basis recognizes the current shipment amount as income, while the cash basis recognizes the payment received as income;