In which accounting method is revenue recorded when cash is received?

The correct answer is Cash Basis Accounting. This method of accounting recognizes revenue at the point when cash is actually received rather than when the income is earned. Under cash basis accounting, expenses are also recorded when they are paid rather than when they are incurred. This approach provides a straightforward view of an entity's cash flow and is often used by small businesses or individuals because of its simplicity and ease of tracking.

In contrast, accrual basis accounting records revenue when it is earned, regardless of whether payment has been received. This allows for a more accurate representation of a company's financial position, reflecting all earned revenues and incurred expenses in the accounting period in which they occur. Tax basis accounting can vary and may follow either cash or accrual practices depending on specific tax regulations, while full cost accounting focuses on capturing all costs associated with producing a product or service, including fixed and variable costs, rather than determining revenue timing.