accrual method


An accounting method that requires income or expenses to be entered when the income is earned or the payment is payable. For example, if a property owner purchases a three-year insurance policy, under the accrual method, only the first year's insurance expense is shown as a journal entry, even if the property owner pays the entire balance in full.

Use accrual method in a sentence

The accrual method was working well for everyone, so we decided to try another method that would work better for everyone.

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Since they were using the accrual method they could not book the entries until they were actually earned and not just paid.

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The accountant was using the accrual method to determine the company revenue and to forecast earnings for the next earnings call next quarter.

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accrual basis accounting wage expense