A system of accounting in which revenues and expenses are recorded as they are earned and incurred, not necessarily when cash is received or paid. Accrual accounting also provides a more accurate picture of company's profitability at a particular time. Statement users can make more informed judgments concerning the company's earnings potential. Publicly held businesses are required to use accrual based financial statements.
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A system of accounting in which revenues and expenses are recorded as they are earned and incurred, not necessarily when cash is received or paid. Accrual accounting also provides a more accurate picture of company's profitability at a particular time. Statement users can make more informed judgments concerning the company's earnings potential. Publicly held businesses are required to use accrual based financial statements.
To view a list of resources available on the SIG website on this topic, click here.