Accrual Basis
/əˈkruːəl ˈbeɪsɪs/
Definitions
- (n.) An accounting method recognizing revenues and expenses when they are incurred, regardless of cash flow.
The company adopts the accrual basis to match income and expenses in the period they occur.
Forms
- accrual basis
Related terms
See also
Commentary
The accrual basis is fundamental in preparing financial statements compliant with GAAP, emphasizing the timing of economic events over cash transactions.
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