Accounting system based on revenue. This system records revenue when earned, and expenses when incurred, rather than when payment is made or received. Totals of revenues and expenses are shown in the financial statements prepared at the end of an accounting period. This system is used by most Corporations and LLCs except when the companies that are very small. Small companies use cash basis accounting. Cash accounting is a system where receipts are recorded during the period they are received, and expenses are recorded in the period in which they are actually paid.