Which accounting method focuses on tax obligations for a given year?

The correct answer is tax accounting, as it specifically focuses on the financial implications of tax obligations for a business within a given year. Tax accounting is designed to comply with the tax laws and regulations of a jurisdiction and determines how income and deductions are recognized for tax purposes. This method often involves adjustments to recognize items on the tax return that might not align with general accounting principles, reflecting the actual tax liability of a business.

Tax accounting differs from general principles like GAAP (Generally Accepted Accounting Principles) and accrual accounting, which emphasize financial reporting and the matching principle of revenues and expenses respectively, rather than tax obligations. Cash accounting, while also focusing on actual cash inflows and outflows, does not exclusively address tax implications but rather the timing of transactions. In summary, tax accounting is distinctly tailored to meeting tax-related requirements and obligations within a specific financial year.