What are accrual entries?

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Accepted Answer

Accrual entries are accounting entries made to record revenue or expenses that have been earned or incurred, but have not yet been received or paid.

Accrual entries are used to match revenues and expenses to the period in which they are earned or incurred, regardless of when the cash is actually received or paid.
They involve debiting an expense account and crediting a liability account for expenses incurred but not yet paid, or debiting a revenue account and crediting an asset account for revenue earned but not yet received.
Accrual entries are necessary for accurate financial reporting and to comply with accounting principles such as the matching principle.
Examples of accrual entries include recording accrued interest expense, accrued salaries, or accrued revenue for services provided but not yet invoiced.

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