Which reporting method would an individual use to recognize income that is expected to be received in the future?

The accrual method is the appropriate reporting method for recognizing income that is expected to be received in the future. Under this method, income is recognized when it is earned, regardless of when the payment is actually received. This principle aligns with the matching concept in accounting, where income and expenses are recorded in the period they are incurred, ensuring that financial statements reflect the true economic activity of a business.

By utilizing the accrual method, an individual can record income at the time it is earned—for example, when a service is performed or a product is delivered—even if the payment is not received until a later date. This approach provides a more accurate representation of an individual’s financial situation and is particularly useful in situations where transactions span multiple periods or involve deferred payments.

In contrast, the cash method records income only when cash is actually received. This could result in a temporary mismatch between when services are provided and when payment is made, which does not give as clear a picture of income earned during a specific period. Therefore, the accrual method is the preferred choice for recognizing future income.