Accrual concept – PetsPedia

Accrual concept

An accrual is a journal entry that can be used to recognize income and expenses that have been earned and spent. It is important to note that in this situation, the cash amounts that have been earned or spent have not yet been received or paid.
Auditors only accept financial statements that have previously been made using the accrual concept, as statements made without using the accrual concept are much less accurate.
Also, without accruals, the amount of income, expenses, and gains or losses in a period will not accurately reflect economic activity within a business.

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