The cash receipts and disbursements method of accounting is used by most individual taxpayers and most noncorporate businesses that do not have inventories.

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The cash receipts and disbursements method of accounting is commonly used by individual taxpayers and noncorporate businesses without inventory because it is simpler to understand and implement compared to other accounting methods. This method records income only when it is received and expenses only when they are paid out, rather than when they are earned or incurred.

The Cash Receipts and Disbursements Method of Accounting Is Used