Accounting Method

Cash versus Accrual. Two basic types of accounting: do you follow just the cash in the cigar box at the end of the day, and that determines whether or not you had a good day? Or do you amortize for this and depreciate for that and treat capital expenditures with all kinds of voodoo, mathy science?

The method you choose has to stay with you throughout the life of the company. You can't just flip back and forth depending on your mood. See Accrual Accounting and Cash Accounting and Cash Flow Statement if you're really bored.