accrual basis accounting

accrual basis accounting definition - finance
The most frequently used accounting method, it records income when it is earned and expenses when they are incurred, regardless of when the money is actually received or spent. Guidelines govern the timing of when income and expenses must be recognized. This contrasts with cash-basis accounting, which reports income and expenses when they are received or paid.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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