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In accounting we view two types of methods to account for your transactions. One is accrual method and the other is the cash method. Accrual accounting works well for companies who have inventory. For accrual accounting to be used properly, customers orders are not actually recognized on the books until the goods are shipped out to the customer.  In addition, until all goods are received for a specific customer, accrual accounting does not recognize the sale. However, in the case of cash, all sales are recognized when cash is received regardless of when the goods are shipped.