Which term refers to the accounting method that recognizes revenue as earned regardless of when cash is received?

The correct term for the accounting method that recognizes revenue as earned regardless of when cash is received is accrual basis accounting. This method aligns revenue recognition with the actual delivery of goods or services rather than the timing of cash transactions.

Under accrual basis accounting, businesses record revenue when it is earned, meaning that the activity that generates revenue has occurred, regardless of when the payment is made. This provides a more accurate representation of a company’s financial performance and position, as it includes all earned income during the accounting period.

In contrast, cash basis accounting only recognizes revenue when cash is received, which can create an incomplete picture of financial performance, particularly for businesses that may have numerous sales on credit. Deferred revenue accounting, on the other hand, deals specifically with revenue that has been received but not yet earned, while expense recognition accounting focuses on matching expenses to revenues in the appropriate period.