Preheat the oven to 340°F.
Line two 8-inch round cake tins with parchment paper.
Mix together the milk and vinegar, and set aside to thicken and curdle.
Add the rest of the wet ingredients to the milk mixture, then sift in the dry ingredients and mix until combined.
Divide the batter evenly between the two tins and bake for 20-25 minutes or until a toothpick inserted in the center comes out clean.
To make the butterscotch sauce, combine butter, cream, and sugar in a saucepan over medium heat. Melt and bring to a simmer. Remove from the heat and let cool to thicken.
For Frosting Option 1, mix all the ingredients together until smooth.
For Frosting Option 2, use a hand mixer or the paddle attachment on a stand mixer to cream the butter on medium-high until creamy and light. With the mixer on low, add the powdered sugar bit by bit, scraping down the sides of the bowl after each addition. Mix in the butterscotch sauce.
Layer the cakes with the butterscotch sauce and frosting. Enjoy!