Jan 11 2011

What is accrual accounting?

Category: Accounting


Accrual accounting is an accounting technique that determines any financial transactions in the periods in which those transactions or events take place regardless of when any cash is received. The general idea behind accrual accounting is identifying certain financial events by matching revenues to expenses at the time in which the transaction takes place rather than when payment is made or received. Using the matching principle gives a more precise representation of a company’s current financial condition.

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