Glossary › Accrual
Accrual
Recording income or an expense before cash moves — recognising the event in the period it belongs to.
An accrual records income earned or an expense incurred before it\'s invoiced or paid — interest accumulating on a loan, wages owed at month-end, work delivered but not yet billed.
Accruals align the books with economic reality rather than cash timing, which is the essence of accrual accounting and accurate period reporting.
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