Cash based accounting focuses on the income that is received. Expenses are only recorded when they are paid. This can give a distorted idea of how a company financial stands.
Accrual based accounting focuses on the income that is due to goods that are exported, or due to services rendered. Expenses are recorded when a firm is knowledgeable that they will have to pay it out. Accrual is accounting matches the expense, paid or not,to the correct revenue and gives a more realistic total for a firm.