Accounting Dictionary - Accounting Terms & Definitions
A: Accruals
Accruals are expenses which were incurred by the business, however they were not yet paid for at the end of the accounting period.
Concept of Accruals is applicable only when the accrual (not cash basis) method is applied for the accounting purposes. This method means that revenue and expenses are recognized when incurred despite cash was not yet received or paid. Application of Accrual method allows to reflect real and reliable revenue and expenses and related assets and liabilities of the business.
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