Accrual Accounting

Account receivable is classified as an asset because it is the amount that the company will receive on behalf of the services that it has provided.

When a company provides its services or delivers its goods before the payment is received is called accrued revenue.

Under the revenue recognition principle, revenue is recognized when itโ€™s earned, not when cash is received.

Modified accrual accounting recognizes revenues only when measurable and available. And recognize expenses when they incur.

When an asset losses its value or there is a reduction in its market value, this reduction in value is referred to as Asset Impairment.

๐’๐ก๐จ๐ฎ๐ฅ๐ ๐ˆ ๐ฎ๐ฌ๐ž ๐œ๐š๐ฌ๐ก-๐›๐š๐ฌ๐ข๐ฌ ๐จ๐ซ ๐š๐œ๐œ๐ซ๐ฎ๐š๐ฅ ๐š๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ? Cash basis vs accrual basis accounting?ย Ahh! Confusing- what are they? Why and how Cash basis accounting is different from accrual basis accounting? Which is the most appropriate accounting method- cash accounting or Accrual Accounting?ย  Looking for the answers to these complicated questions? Then you are at the right …

๐’๐ก๐จ๐ฎ๐ฅ๐ ๐ˆ ๐ฎ๐ฌ๐ž ๐œ๐š๐ฌ๐ก-๐›๐š๐ฌ๐ข๐ฌ ๐จ๐ซ ๐š๐œ๐œ๐ซ๐ฎ๐š๐ฅ ๐š๐œ๐œ๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ? Read More »

Accrual accounting is an accounting method that records revenues and expenses when they incur- same accounting period.