Accrual Accounting
Accrual accounting records revenue when earned and expenses when incurred, even when cash moves in a different period.
How accrual accounting works
Accrual accounting records revenue when earned and expenses when incurred, even when cash moves in a different period. The underlying entries should remain traceable to source documents and consistent accounting policies.
Why it matters
This concept affects the accuracy of financial statements and the decisions made from them. Consistent treatment also makes period comparisons and external review more reliable.
What to review
Confirm that the account, period, amount, counterparty, and supporting record agree. Investigate unexplained changes and document any judgment used.
Frequently asked questions
What is accrual accounting in simple terms?
Accrual accounting records revenue when earned and expenses when incurred, even when cash moves in a different period.
Why does accrual accounting matter?
It helps keep the ledger accurate, financial statements explainable, and business decisions grounded in complete records.
Can GlacialBooks help with accrual accounting?
GlacialBooks supports the bookkeeping workflow with traceable ledger activity, reconciliation, reports, and review controls. Confirm policy choices with your accountant.
Sources
Reviewed 2026-07-18.
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