What is an accrual?, Accounting Basics

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Accrual basis of accounting means that the costs or revenues of events are renowned in the period in which they happens; by the cash flows may take place in another accounting period.


Like for a period of July 05 - October 05, if the organization was because of receive 1000K from an individual X but has not received yet for some reason, will receive in November 05. It would be still be accounted for in the period July 05 - October 05 and not the period initial from November 05.

 


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