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The accruals concept is that income and expenses should be matched together and dealt with in the income statement for the period to which they relate, regardless of the period in which the cash was actually received or paid. All accounting record is based on the accruals.
The accrual principle show all of the expenses incolved in making the sales for a period should be matched with the sales income and dealt with in the period in which the sales themselves are accounted for.
For example:
In the accounting period, a sale is made and the invoice is sent to the customer, but the company hasn’t received the cash. This is done by setting up an account receivable in the balance sheet for the amount of cash that is due from the sale.
Dr accounts receivable
Cr sales revenue
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