Accrual basis
Financial Dictionary — Accounting Concepts
Definition
An accounting basis under which transactions and events are recognized when they occur, not when cash is received or paid.
Detailed Explanation
Accrual basis recognizes transactions when they occur (earned/incurred) rather than when cash is received or paid.
Common Uses
- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.
- Used when training staff or documenting procedures and policies.
Practical Example
- Example: Teams reference **Accrual basis** when defining terms in manuals, policies, or training materials.
Why This Term Matters
- Why it matters: Improves clarity and consistency across documentation and decision-making.