What is the definition of Accrual Basis Accounting?

Accrual Basis Accounting

Accrual basis accounting refers to a major accounting method that recognizes revenues and expenses at the time a transaction occurs, regardless of when cash is exchanged. Accountants using this method record financial transactions as soon as the invoices are sent/received and money is pledged. Accrual basis accounting is generally considered the standard accounting practice among most organizations. In contrast to cash basis accounting, accrual basis accounting is often viewed as a more accurate portrayal of your financial activity as it includes services provided or received that have not yet been paid for. 

 

NEXTSTEPS | 11.16.20

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