accrual

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Related to Accrued Revenue: Accrued Expense

Accrual Accounting

A system of accounting that recognizes revenue and matches it with the expenses that generated that revenue. Unlike other systems of accounting, which recognize revenue and expenses in the order in which they are received, the accrual accounting convention ignores the function of time and only considers what expenses generate what revenues, even if payments have not actually been made. Companies with inventories are required to use the accrual method for tax purposes.

accrual

an expense which is outstanding at the end of a trading period and which needs to be included in the accounting results for the period. For example, an unpaid INVOICE for car repairs would be included in the expenses of the trading period in calculating profits, since the repair costs relate to that period; the unpaid bill is counted as a liability of the firm at the period end, and afterwards until it is paid, and is added to CURRENT LIABILITIES in the firm's BALANCE SHEET. See PREPAYMENT.
References in periodicals archive ?
Having accrued revenues of PS2m in its first year, Goodfellows is now poised to grow the workforce to meet the increasing demands from clients, and brand awareness is also set to soar through a planned TV project.
In theory, an entity's operating cash flows should correspond to its accrued revenues and expenses within one operating cycle before or after accrual.
Summary: MAKKAH: Hotels and furnished apartments in Aziziyah district in Makkah have accrued revenues of more than SR250 million during Ramadan due to the large number of domestic pilgrims keen to spend the holy month at the Grand Mosque.
You will learn about one of those methods as you study how to prepare and post adjusting journal entries for inventory, prepaid items, depreciation, accrued expenses, accrued revenues, changes in value of raised breeding livestock, income taxes, and deferred taxes, and how to prepare an adjusted trial balance.
TCL Financial, which also provides business payroll services, accrued revenues of $250,000 in 2006.