How is profit determined under the cash basis of accounting and the accrual basis of account?

Under the cash basis of accounting, profit is determined by recognizing revenues and expenses only when cash is actually received or paid. In contrast, the accrual basis of accounting recognizes revenues when earned and expenses when incurred, regardless of the cash flow. This means that under the accrual method, profit can be reported even if cash has not yet been received or paid, providing a more accurate picture of financial performance over a specific period.