Cash accounting:
In cash basis of accounting, revenue is recognized at the time when cash is collected from the customer, rather than when the company sells the goods. Expenses are recognized when payment is made, rather than when related goods are used in the business operations. The cash basis of accounting measures the amount of cash received and paid out during the period, it does not provide a good measure of the profitability of activities undertaken during the period.
Accrual accounting:-
The policy of recognizing revenue in the accounting records when it is earned and recognizing expenses when the related goods are used is called accrual basis of accounting. The purpose of accrual accounting is to measure the profitability of the economic activities conducted during the accounting period. The important concept involved in accrual accounting is the matching principle. Revenue is matched with all of the expenses incurred in generating that revenue thus providing a measure of the overall profitability of the economic activity. Payment of expense has nothing to do with the recording of expense.
For example an electricity bill of January paid on 22nd of February shall be recorded in the books as an expense on the same date in cash accounting system but in an accrual based system it would be recorded in the books as an expense in the month of January because the benefit against the bill pertains to the month of January.