Final answer:
The two most prevalent methods of accounting are cash basis and accrual basis accounting, with the former recognizing financial transactions upon cash flow and the latter upon earning or incurring revenues and expenses.
Step-by-step explanation:
The two most common methods of accounting are cash basis accounting and accrual basis accounting. Cash basis accounting recognizes revenues and expenses at the time the cash is either received or paid out. In contrast, accrual basis accounting recognizes revenues when they are earned and expenses when they are incurred, regardless of when the money is actually received or paid. For example, under the accrual method, revenues for services rendered are recognized even if the client hasn't paid yet, as opposed to the cash method where revenues would be recorded upon receipt of payment.