Accrual Accounting
/əˈkruːəl əˈkaʊntɪŋ/
Definitions
- (n.) An accounting method recognizing revenues and expenses when they are incurred, regardless of when cash is exchanged.
Accrual accounting provides a more accurate financial picture by recording transactions when they occur, not when cash is received or paid.
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Commentary
Accrual accounting is essential in legal contexts involving financial disclosures and contract performance evaluations, as it reflects economic events rather than cash flow timing.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.