In income statement, do we record revenue on cash basis or accrue basis?

We record revenue on accrual basis. This follows the accrual basis of accounting.

Income statement is being prepared on accrual accounting basis, therefore, the revenue is to be recorded on the basis of supply of goods or rendering of services irrespective of receipt of cash against those goods or services. Therefore, revenue should be recorded when all of the following criteria are met:

1.  the associated significant risks and rewards have been transferred to buyer
2. the seller does not have continuing managerial involvement nor control over the goods sold
3. the amount of revenue can be measured reliably
4. it is probable that economic benefits will flow to the organization
5. the cost incurred or to be incurred in respect of transactions can be measured reliably