What is Accrual basis?
Also known as: accrual principle
An approach under which a transaction is recorded not on the day money comes in or goes out, but in the period in which it actually took place. Income is recognised in the month the goods are delivered or the service is rendered, and expenses in the month the resource is used; when the money moved does not matter. Under NAS No. 1, all financial statements except the statement of cash flows are prepared on this basis. As a result, the statements give information not only about money paid, but also about amounts to be received and paid in the future: goods sold but not yet paid for appear in the balance sheet as accounts receivable, and services received but not yet paid for as accounts payable.
Source: 1-son BHMS, 15-band; 1-son BHMS, 16-band; 1-son BHMS, 17-band