Keyword Analysis & Research: accrual basis accounting means

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What is the accrual method of accounting?

What is 'Accrual Accounting'. Accrual accounting is an accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur.

Why is accrual accounting preferred?

Accrual accounting is generally preferred because it gives a fairer picture of the business' real obligations, including those transactions that have been committed to but not yet completed.

When to accrue expense?

An accrued expense occurs when an accounting period is coming to a close and there are unpaid expenses and unrecorded liabilities. For example, wages that have been earned but not yet disbursed would represent an accrued expense. Companies handle accrued expenses by making adjusting entries to the general journal.

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