Which 'method of accounting' am I under if I do carry inventory and expenses that were less than $29 million over the past 3 years

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.

See Publication 538 (01/2022), Accounting Periods and Methods

Good morning,

I have already read the definition of those terms, which is the reason that I asked that question.

Cash method

This is the simplest and most common for small businesses that don't carry an inventory. (I do)

With this method:

• You deduct your expenses in the tax year that you actually pay them (you don't carry them over to the next tax year) (Yes. Incurred expenses and paid, however the expenses were for inventory).

**************However*************

Accrual method

If your receipts are under $29 million, you can use the cash method regardless of your inventory. 

The difference between accrual and cash is when you record your income and expenses. For instance, if you sent an invoice to a customer on December 31, 2024, that was paid on January 3, 2025. Under accrual method you would count that income in 2024 (when you earned the income), but under the cash method that income would be counted in 2025 (when you actually received it).

Same with expenses, expenses are counted when you order the supplies under accrual, but expenses are not counted under the cash method until you actually pay for the expense.