Accrual Basis Accounting

Business, Legal & Accounting Glossary

Definition: Accrual Basis Accounting


Accrual Basis Accounting


Full Definition of Accrual Basis Accounting


The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basis accounting, which reports income when received and expenses when paid. Under the accrual method, companies do have some discretion as to when income and expenses are recognized, but there are rules governing the recognition. In addition, companies are required to make prudent estimates against revenues that are recorded but may not be received, called a bad debt expense. See also: List of Key Accounting Terms and Definitions at InvestorGuide.com.


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Definition Sources


Definitions for Accrual Basis Accounting are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 20th November, 2021 | 0 Views.