I wish to understand how to do accruals and understand it in simple English?

transaction which does involve immediate cash payment or receipt but posted in accounts in anticiaption of receiving or paying in agreed future date

Lot of Defination to read ;) ... Just follow an example 

The Accrual concepts means that EXPENSES & REVENUES are recorded in the period(month/year) when occur, whether or not cash is involved( regardless of Cash).

For Example You earn a salary of Rupees80,000 at the END of Each Month .... Which means YOu get a Salary on every30th of Each month ? OK 

In the Month of March2014 , You are going to receive a salary of80,000 on30th this month .. Which means You have already completed your whole month Tasks in this month of march and now You become debtor(receivable) from your company(Payable) , Which means your personal Assets Should increase by80,000 before you actually  recieve the salary...... 

Entry on29th March

Income Receivable   Debit ( Assets) 

Income from salary   Credit 

Now See Through Accrual Concept You have recorded your in March ... But You Actually Receive Cash on1st April  as there is Sunday(suppose) on31st March ... 

Regardless of Cash recieved you actually earn this salary in March ....

Though you also made Few Expenses out of Your Pocker in March which will be recorded in march ....

For example You get a Bill (Electricity bill) for the month of March and the due date is April05 .... But you paid the bill after receiving your salary on1st April  ... i.e suppose2nd april 

Electricity Expense  Debit 

Cash Credit ...

>>>>Recorded Expense for the  month of March 

Similarly we would not consider the date on which we actually paid the Amount but the month its actually relates to ,  This is true concept of Accrual ......

Matches Expenses and Revenues of a particular Period so we get exact profit and loss and true picture of financial position of a company , and we could easily judge the performance of a company from previous months/periods... 

Hope you like the example ;)  

Accrual basis : we record the transaction when it done regardless of paid or received

There are two ways to record the financial transaction:1-cash basis : in this way we record the transaction only when we paid or received money 

2- Accrual basis : we record the transaction when it done regardless of paid or received 

example if the company does not pay the rent of its building then we will make the rent debit and the owner of the building credit and when we pay the rent we will record the owner debit and cash or cash in bank credit .