The cash method of accounting recognizes revenue when it is received and expenses when they are paid. The accrual method of accounting recognizes revenue when it is earned and expenses when they are incurred, regardless of when the cash is received or paid. The LLC should check the method of accounting that it has used to report its income on Form 568. If the LLC is using the cash method, it should check the 'Cash method' box. If the LLC is using the accrual method, it should check the 'Accrual method' box.