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Accrual Accounting

Recognising income and expenses when they are earned or incurred, not when cash moves.

Area
Accounting
In this area
51 terms of 257

Accrual accounting records a sale when goods are delivered and a cost when goods are received, regardless of payment date. It matches revenue to the costs that produced it in the same period.

This is why goods received but not yet invoiced must be accrued at period end. Without that entry, the stock is on the balance sheet but its cost is not, and profit is overstated.

Related terms

Accrued Expense

A cost incurred but not yet invoiced or paid.

Prepaid Expense

A payment made in advance for benefit not yet received.

Goods Received Not Invoiced

GRNI

Stock received into the books before the supplier invoice has arrived.

Month-End Close

The process of finalising and locking a period’s financial records.

More in Accounting

Accounts Payable (AP) Accounts Receivable (AR) Aging Report Bad Debt Provision Balance Sheet Bank Reconciliation Break-Even Point Budget Variance

Accrual Accounting is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 257 glossary terms describe things the platform actually does.

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