A method of accounting for VAT on the basis of cash paid and received, rather than on tax invoices issued and received. Use of the method is subject to conditions. HM Customs & Revenue Glossary
An accounting method where receipts are recorded during the period they are received, and the expenses in the period in which they are actually paid.
Basically, when the cash is received for a sale, it is recorded in the accounting books as a sale. This is in contrast with accrual accounting, where revenue and expenses are recorded when they are incurred.