What is the accrual method?

The accrual basis of accounting is the concept of recording revenues when earned and expenses as incurred. Accrual basis accounting is the standard approach to recording transactions for all larger businesses. This concept differs from the cash basis  of accounting, under which revenues are recorded when cash is received, and expenses are recorded when cash is paid.

This is the worldwide recognized method of accounting. In this method all expenses & income are accounted on the basis of occurrence in the particular accounting year be it cash based or accrual.

The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period.

The accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid

: Accrual method Expenses are matched with the related revenues and are reported where the expenses occursnot not when the cash is paid The results of accural according is an income statement that better measures the profitability of a company during a specific time period

Under the accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. 

 

the way of accounting for recording this two way , a accrual method and cash method,

all companies used accrual method, no company used cash method only government accounting and some nonprofit company used cash method or adjustment cash method

and to understand the diffidence by example

some company make sale good by 1000

in accrual method company recorded revenues when given good and issued  invoice and showing the Clint as debt by invoice amount,

after when collect money , recording as receipt to debtors,

in cash method they recorded when received money

accrual record when received money now or now in cash only recorded when received cash

best & Regards