The IRS defines cash vs accrual and the effect on foreign tax here. It includes:
- A cash basis taxpayer reports income when it is actually received, and reports expenses when they are paid. The majority of people who file individual income tax returns are cash basis taxpayers.
- Accrual basis taxpayers compute income when they actually earn it or became entitled to it. Their deductions are computed based on when those debts were incurred, but not necessarily paid.
Most individual taxpayers are cash basis taxpayers. Taxpayers on a cash basis may choose to use the accrual method to determine the foreign tax credit. However, once this choice has been made, the taxpayer must use the accrual method for the foreign tax credit on all future tax returns.
References:
Cash vs. Accrual Accounting: Which is Best? | QuickBooks
Comparing Cash and Accrual Bases of Accounting | Department of Labor
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