accrual basis accounting
Definition
System of accounting based on 'accrual principal' under which revenue is recognized (recorded) when earned, and expenses are recognized when incurred. Totals of revenues and expenses are shown in the financial statements (prepared at the end of an accounting period), whether or not cash was received or paid out in that period. Accruals basis accounting conforms to the provisions of GAAP in preparing financial statements for external users, and is employed by all firms except the very small ones (which use cash basis accounting). Also called accrual accounting. See also modified accrual basis accounting.
accrual basis accounting is in the Accounting & Auditing subject.
accrual basis accounting appears in the definitions of the following terms: cash basis accounting, estimated revenue, accrual accounting, matching principle, accruals, basis of accounting, realization, change in accounting method, incurred cost and accounting change
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