The both are method of recognizing revenue and expenditure. How  and When you add or pass entry for income and expenditure.  In accrual accounting we enter the transaction as income or expenses if it is not paid or received . For example salary payable on 31.3 2014 we will be treated as expense on that data and expenditure will be booked.

In cash accounting method the expenses and revenue is recognized only when the payment is made. The cash method is most used by small businesses and for personal finance