accruals

accruals
1. One of the fundamental accounting concepts, also known as the matching concept. Revenue and costs are credited or charged to the profit and loss account for the year in which they are earned or incurred, not when any cash is received or paid. For example, if a sale is made on credit this year, but the cash is only received next year, the sale is treated as income in this year. Dresdner Kleinwort Wasserstein financial glossary
2. Amounts owed to third parties for which the company has not yet been invoiced. This is shown in the balance sheet of a company as part of creditors. For example, where a company has not been invoiced by a telephone company for its telephone bill for the last three months of the year, it will show in its accounts an accrual for the estimated amount of the bill. Dresdner Kleinwort Wasserstein financial glossary

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   Estimates of a company's costs that have been incurred but have not yet been paid. They appear on the profit and loss account and on the balance sheet.

Financial and business terms. 2012.

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  • accruals basis — /ə kru:əlz ˌbeɪsɪs/, accruals concept /ə kru:əlz ˌkɒnsept/ noun a method of preparing accounts in which revenues and costs are both reported during the period to which they refer and not during the period when payments are received or made …   Dictionary of banking and finance

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