What is the difference between Accrual and Advance?

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Accrual is the recognition of revenue or expenses when they are incurred, while advance is the payment or receipt of funds before the related revenue or expenses are recognized.

Accrual is based on the matching principle, where revenue or expenses are recognized when they are incurred, regardless of when the cash is received or paid.
Advance refers to the payment or receipt of funds before the related revenue or expenses are recognized.
Accrual accounting is used to record transactions in the financial statements, while advances are typically recorded as liabilities or assets until they are recognized as revenue or expenses.
Example of accrual: A company provides services to a client in December but receives payment in January. The revenue is recognized in December when the services are provided, not when the payment is received.
Example of advance: A customer pays a deposit for a product that will be delivered in the future. The payment is recorded as an advance until the product is delivered and the revenue is recognized.

What is the difference between Accrual and Advance?

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