Accrual-based accounting will display money as it is earned rather than when it is collected. For example, an accrual-based report will show products and services that have been purchased with a gift card but will not show the actual sale of the gift card to a client.
Cash-based accounting will display sales as the money comes into the business. For example, a cash-based report will show the money earned when a client purchases a gift card but will not show the products and services that are purchased with that gift card.
For more information on accrual vs. cash base accounting, click here.