Accrual Basis
The accrual basis is an accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.
Accounting terms for accrual basis, accrual concepts, deferred expenses, deferred income, deferred revenue, expense recognition, and matching.
Accrual, Matching, and Deferred Items covers accrual basis, accrual concepts, deferred expenses, deferred income, deferred revenue, expense recognition, and matching.
Use these pages when a reporting concept changes how income, assets, liabilities, cash flows, disclosures, or analytical ratios should be read. It sits inside Accrual, Income, and Recognition Principles, so readers can move up when the broader accounting context matters.
Use the table below to choose the narrower accounting branch before applying a term to a statement line, model input, audit trail, tax schedule, covenant test, or management report.
| Area | Use it for |
|---|---|
| Accrual Basis | Accounting basis that records revenue when earned and expenses when incurred, even when cash is received or paid in a different period. |
| Accrual Concept | The accrual concept records revenues and expenses when earned or incurred rather than when cash is received or paid. |
| Deferred Expense | A deferred expense is a cost paid or incurred before full recognition in profit, so it is carried as an asset and expensed over the periods that benefit. |
| Deferred Income | Deferred income is cash received before earning revenue, reported as a liability until performance occurs. |
| Deferred Revenue | Liability recorded when a customer pays before the company has delivered the related goods or services. |
| Expense Recognition | The principle that expenses should be recognized in the period when they are incurred. |
| Matching Principle | Accounting principle that records expenses in the same period as the revenues they help generate. |
Financial-reporting content is educational and does not provide accounting, audit, tax, legal, investment, or valuation advice.
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The accrual basis is an accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.
The accrual concept records revenues and expenses when earned or incurred rather than when cash is received or paid.
A deferred expense is a cost paid or incurred before full recognition in profit, so it is carried as an asset and expensed over the periods that benefit.
Deferred income is cash received before earning revenue, reported as a liability until performance occurs.
Deferred revenue is a liability for customer payments received before the promised goods or services are delivered.
The principle that expenses should be recognized in the period when they are incurred.
Accounting principle that records expenses in the same period as the revenues they help generate.