Published: 2024-06-166 backlinks
accrual accounting
Accrual Accounting
In contrast to cash-basis accounting, accrual accounting is a method that recognizes and reports revenues and expenses at the time they are incurred, regardless of when cash is paid. Revenue is recognized when the service is actually performed. In other words, the profit on the financial statements does not match the actual cash flow.
| Name | Description | Result |
|---|---|---|
| Unearned revenue (Deferred revenue) | Revenue received in advance | Liability (Cash↑, Unearned revenue↑) |
| Accrued revenue (Accrued income) | Revenue not yet received in cash | Asset (Revenue↑, Accounts receivable↑) |
| Prepaid expenses (Prepaid expense) | Expenses paid in advance | Asset (Cash↓, Prepaid expenses↑) |
| Accrued expenses (Accrued expense) | Expenses not yet paid in cash | Liability (Expenses↑, Accrued expenses↑) |
 |
| Before | On time | After | |
|---|---|---|---|
| Inflow | Unearned revenue (Deferred revenue) (Liability) | Revenue | Accrued revenue (Accrued income) (Asset) |
| Outflow | Prepaid expenses (Prepaid expense) (Asset) | Expense | Accrued expenses (Accrued expense) (Liability) |
Related Items
- Deferred Income
- Accrued Liabilities
- Prepaid Expenses
- Accrued Expenses
Topics:
Category: Wiki/Economy
Backlinks6
Free Cash Flow to Equity
Wiki/EconomyCreated: 24-08-16Updated: 26-08-24
Deferred Income
Wiki/EconomyCreated: 22-11-01Updated: 26-08-24
Accrued Liabilities
Wiki/EconomyCreated: 24-06-16Updated: 26-08-24
Prepaid Expenses
Wiki/EconomyCreated: 24-06-03Updated: 26-08-24
Accounts Receivable
Wiki/EconomyCreated: 23-12-24Updated: 26-08-24
Cash Flow Statement
Wiki/EconomyCreated: 22-11-01Updated: 26-08-24