What is Accrual entry and Journal

Question

Accepted Answer

Accrual entry is a type of accounting entry that records revenue or expenses before they are actually received or paid.

Accrual entry is used to match revenue and expenses to the period in which they are earned or incurred, regardless of when the cash is received or paid.
It involves recording an accrual (an amount that is owed or earned) and a corresponding offsetting entry.
Accrual entries are typically made at the end of an accounting period to ensure accurate financial reporting.
For example, if a company provides services in December but doesn't receive payment until January, an accrual entry would be made in December to recognize the revenue.
Similarly, if a company incurs expenses in December but doesn't pay them until January, an accrual entry would be made in December to record the expenses.

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