BizTerm Definition
Accrual Accounting, Accrual Basis Accounting, Accrual Method
Short Definition
When revenues are earned and expenses incurred
Full Definition

An accounting method under which income is subject to tax after all events have occurred which fix the right to receive such income. Deductions are allowed when all the events have occurred to fix the obligation to pay the debt. For instance, we say that revenue is recognized when earned rather than when the resulting cash is colledted. Similarly, we would recognize an expense when incurred rather than when the required cash is paid.

Related Links

Previous Biz Term Next Biz Term