Cyclopedia

Accrual Accounting

Summary

Accrual accounting is an accounting method that measures the performance and position of an entity by recognizing events regardless of when cash transactions occur. Economic events are recognized by matching revenues to expenses at the time the transaction occurs rather than when payment is made or received. This method allows the current cash inflows/outflows to be combined with future expected cash inflows/outflows to give a more accurate picture of a entity’s current financial situation.

---

GAO Glossary of Terms and Definitions (September 2005) 

Accrual Accounting

A system of accounting in which revenues are recorded when earned and expenses are recorded when goods are received or services are performed, even though the actual receipt of revenues and payment for goods or services may occur, in whole or in part, at a different time. (See also Cash Accounting; app. III.)

[PAGES 7]

---

Glossary of the Congressional Budget Office

Accrual Accounting

A system of accounting in which revenues are recorded when earned and expenses are recorded when goods are received or services are per- formed, even though the actual receipt of revenues and payment for goods or services may occur, in whole or in part, at a different time. See cash accounting, credit reform, and outlays.

Previous: Accounts Receivablee

Next: Activities Reports