Accrual accounting

Accrual accounting records revenue when it is earned and expenses when they are incurred, regardless of when cash is received or paid.

Revenue recognition: The accounting process for deciding when earned revenue is recorded. It determines when accrual accounting recognizes revenue, even if payment comes later.
Cash-basis accounting: An accounting method that records transactions when cash is received or paid. It uses cash movement rather than earning or incurring as the recording trigger.
Generally Accepted Accounting Principles (United States): The authoritative accounting standards and conventions used by many entities in the United States. US GAAP generally bases financial reporting on accrual accounting.
Double-entry bookkeeping: A bookkeeping system that records each transaction with equal debit and credit amounts. Accrual transactions are recorded through balanced entries across accounts.
Periodicity assumption: The accounting assumption that an entity’s continuing activities can be divided into reporting periods. Accruals assign economic activity to discrete periods for comparison and reporting.
Matching principle: An accounting principle that associates expenses with the revenues they help generate. It guides when costs are recorded relative to the revenue they support.
Modified cash basis: An accounting method that combines cash-basis records with selected accrual adjustments. It offers a practical middle ground for entities not using full accrual accounting.
International Financial Reporting Standards: Accounting standards issued by the International Accounting Standards Board for use in many jurisdictions. IFRS financial statements generally apply accrual accounting, subject to defined exceptions.
Journal entry: A dated record of a business transaction expressed as debits and credits. Accruals and adjustments enter the ledger as journal entries.
Revenue: Income generated from an entity’s ordinary activities. Accrual accounting can report revenue before the related cash collection.

Linked from 12 pages