Final answer:
The appropriate accounting basis which records transactions only upon the actual movement of cash is the cash basis of accounting. This contrasts with the accrual basis, which records transactions when they are earned or incurred, regardless of when cash is received or paid.
Step-by-step explanation:
An accountant who records a transaction only when cash is received or disbursed is using the cash basis of accounting. Unlike the accrual basis of accounting, which recognizes revenue when it is earned and expenses when they are incurred, the cash basis of accounting recognizes revenue and expenses only when the related cash is received or paid out. This method is often used by smaller businesses and for personal finances because of its simplicity.
One of the key distinctions of the cash basis is that it does not recognize accounts receivable or accounts payable. These are the amounts that a company is entitled to receive or obligated to pay in the future. For example, if a business does work in one fiscal period but doesn't get paid until the next, a cash basis accountant would not record the revenue until the cash is actually received.
By contrast, the accrual basis would record the transaction when the service is completed, irrespective of when the cash payment is made. Choosing between accrual and cash accounting can have significant impacts on taxation and business decision-making, as it affects the way income and expenses are timed and recognized. The correct answer to the question about the accounting method that records transactions only when cash changes hands is the 'd) Cash' basis of accounting.