Provisions for income earned but not yet billed, or for expenses incurred but not yet paid. Examples are the amount of sales you have made but which you have not yet been paid for, and the cost of electricity which you have used but have not paid for, even if you have not yet been billed for it.
Expenses that have been incurred or revenues that have been earned but have not been recorded.
Costs incurred for which bills have not yet been received, e.g. electricity charges which accrue daily but are only billed every quarter - an estimated amount since the last bill is accrued.
The process of matching expenditure or income to the accounting period in which it was incurred rather than paid. For example, your telephone bill is posted in arrears. If no bill has been received, you may choose to estimate the costs based on previous bills and create an accrual for that value.
obligations owed but not yet billed (ACCR).
Money that you owe to a supplier for goods or services that you have received, but not yet paid for in full.
The process of allocating expenses, etc., To one or more accounting periods even though no specific transaction occurred in those related periods. The point of this is usually to show more fairly how an expense relates to the way in which it is used up.
Revenue and expenses that are recorded as they occur, even though they may not have actually been paid.
If during the course of a business certain charges are incurred but no invoice is received then these charges are referred to as accruals (they 'accrue' or increase in value). A typical example is interest payable on a loan where you have not yet received a bank statement. These items (or an estimate of their value) should still be included in the profit & loss account. When the real invoice is received, an adjustment can be made to correct the estimate. Accruals can also apply to the income side.
Amounts earned and included in your accounts for which payment has not yet been received.
Expenditures that are incurred in the current period but will not be paid until the next period, or revenues that are earned in one period but will not be received in cash until the next period.
Accruals are amounts that are owed to third parties for which a business has not yet been invoiced. The total of accruals is shown in the balance sheet as part of creditors due less than one year. For example, where a business has not been invoiced by an advertising agency for its costs for the last three months of the year, it will show in its accounts an accrual for the estimated amount of the invoice.
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. 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.
The recognition of income and expenses as they occur even though they are not received or paid for until a later period.
