a method of accounting in which each item is entered as it is earned or incurred regardless of when actual payments are received or made
This concept applies to firms that employ an accrual basis accounting system.
The debit and credit method, as well as the accrual basis of accounting, shall be adopted as the methods and principles for keeping accounts.
Understand how accrual accounting differs from a cash basis.
Under the accrual basis it needs to record revenue in the period in which it is earned and to record expenses in the period in which they are incurred.
The financial statements of Legal Aid Services Council are prepared on an accrual basis.