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Accounting & Tax vocabulary · Bookkeeping & Ledgers

Accrual

Meaning in accounting & tax, with examples

/əˈkruːəl/nounCore term

In accounting & tax, accrual means: An amount recorded in the period it belongs to, even though cash has not yet been paid or received, such as a utility bill that only arrives next month.

In Turkish: tahakkuk, tahakkuk kaydı

How it is used

Accountants post accruals at month-end so that costs and revenue land in the right period. The accrual basis (accrual accounting) is the standard method for companies. The verb is accrue.

Example sentences

  1. We haven't received the lawyer's invoice yet, so post an accrual for 30,000 lira.

  2. Under the accrual basis, revenue is recorded when it is earned, not when the customer pays.

Common collocations

  • post an accrual
  • reverse an accrual
  • accrual basis
  • accrual accounting
  • year-end accruals
  • accrued expenseA cost that belongs to a period but has not yet been invoiced or paid, recorded as an expense and a liability so the period shows its true cost.
  • cash basisA method of accounting that records income only when money is received and expenses only when they are paid, rather than when they are earned or incurred.
  • month-end closeThe set of tasks accountants complete after each month ends, such as posting accruals and reconciling accounts, so that the month's results are final.
  • journal entryA record of one business transaction in the accounting system, showing the date, the accounts affected, the debit and credit amounts and a short description.
  • deferred revenueMoney received from customers for goods or services not yet delivered. It is recorded as a liability until the company has earned it.

More terms: Bookkeeping & Ledgers

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This page explains English vocabulary for learners. It is not financial advice.