[svthompson]

I need the definition of accurals

[bEaUtIfUlbRuNeTtE]

As far as I know, you earn x amount of personal time a week. I believe accural means earned.

[Wildsporty]

SV

Accrual Accounting
An accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions happen.

Notes:
The opposite of this is cash accounting, which recognizes transactions only when there is an exchange of cash. But under accrual accounting, for example, if you buy a stereo on credit, the company you buy from would still recognize the event as a transaction.


It is a method of accounting that recognizes expenses when incurred and revenue when earned rather than when payment is made or received. Thus, it is the act of sending the goods or receiving an inventory item that is important in determining when transactions are posted on financial statements. For example, using accrual accounting, sales are recorded as revenue when goods are shipped even though payment is not expected for days, weeks, or months. Most firms use the accrual basis of accounting in recording transactions.


The other method of accounting "cash Accounting" is one in which the receipt and payment of cash are the basis for recording transactions. Thus it is not the date on which goods and services are received that matters, as in accrual accounting, but the dates on which the cash changes hands for the transactions. Cash basis accounting is typically used for tax purposes by individuals but not by corporations. E other accounting method is cash accounting.

Hope this explains it.. I think this is what you are looking for.

Some accrual policies have the ability to carry over or roll over some or all unused time that has been accrued into the next year. This would be the Accruals when pertaining to vacation or PTO time .

Shirley

[morgaine300]

I suspect that you are meaning an accrual as opposed to a deferral. Are you doing adjusting entries?

"An accrual" is not really saying the same thing as "accrued basis" of accounting, though one is done because of the other. That's why I suspect you mean as opposed to deferrals.

An accrual is where you are recognizing a revenue or an expense prior to the time the cash is received/paid. i.e. all your receivables and payables are from accruals. Like you record revenue earned, but it gets paid later, so you put it into receivables.

Versus a deferral, which is the opposite. That is when the money happens first, and then you record the revenue or expense later. Like prepaid insurance. You pay for the insurance up front, but then don't expense it until it expires later.

Accrual: revenue/expense first, money later
Deferral: money first, revenue/expense later