What is accrual concept?

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Accrual concept is a method of accounting where revenues and expenses are recognized when earned or incurred, regardless of when payment is received or made.

Accrual concept is based on the matching principle, which means that expenses should be matched with the revenues they helped generate.
Under accrual accounting, revenue is recognized when it is earned, even if payment has not been received yet.
Similarly, expenses are recognized when they are incurred, even if payment has not been made yet.
Accrual accounting provides a more accurate picture of a company's financial health than cash accounting.
Examples of accruals include accounts receivable, accounts payable, and accrued expenses.
Accruals are recorded through adjusting entries at the end of an accounting period.

What is accrual concept?

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