Entity: ACCRUAL
Accrual refers to the process of recording revenue or expenses when they are incurred, regardless of when the cash is exchanged. It is a fundamental concept in accounting and finance.
Accrual
Etymology
The word 'accrual' originates from the Latin word 'accrescere' meaning 'to grow'.
Definition
Accrual refers to the process of recording revenue or expenses when they are incurred, regardless of when the cash is exchanged. It is a fundamental concept in accounting and finance.
Historical Context
Accrual accounting has been used for centuries to provide a more accurate picture of a company's financial health by matching revenues with expenses in the same accounting period.
Cultural Significance
Accrual accounting is a standard practice in the business world, ensuring transparency and accuracy in financial reporting.
Related Concepts
Accrual accounting is often contrasted with cash accounting, where transactions are only recorded when cash is exchanged.
See Also
The act or process of accruing revenue or expenses in accounting and finance, recognizing them when they are incurred rather than when cash is exchanged.