Cash basis accounting is usually compared with the accruals basis accounting.
Under cash basis accounting, you recognize income and expense when it has been paid or received regardless of the period in which it relates.
For example lets say that you paid 3000 for rent for 15 months (January 2011 to March 2012).
Under cash basis, you would credit cash and debit expenses with 3000.
Under accruals you would :
Debit Rent Expense for (3000/15)*12
Debit prepaid expenses for (3000/15)*3
Credit Cash 3000