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Definition

Accrual Accounting

Accrual accounting is an accounting method that records the financial transactions of a business when they are incurred, regardless of when cash transactions occurred.

Example:

A customer pays on July 30th for services that will be provided on August 10th. The accrual method recognizes $500 of revenue only when the services provided for the customer are concluded, in this case on August 10th.

See also