The difference between the two is when revenue and expenses are recognized. Cash basis is the simplest because revenue is recorded when the “cash” is received and expenses are recorded when the “cash” is paid out. The Accrual basis helps us follow a couple other principles. Revenue recognition principle and the matching principle says we recognize revenue when service or product is delivered, not the “cash” and that all expenses incurred to deliver said products or services be recognized in the same time period. Therefore we need the Accounts Receivable account (money we are owed) and the Accounts Payable account (money we owe) to follow these principles.