accrualəˈkru əl
English Definitions:
accumulation, accrual, accruement (noun)
the act of accumulating
accrual (Noun)
An increase; something that accumulates, especially an amount of money that periodically accumulates for a specific purpose
accrual (Noun)
a charge incurred in one accounting period that has not been paid by the end of it.
Accrual
Accrual of something is, in finance, the adding together of interest or different investments over a period of time. It holds specific meanings in accounting, where it can refer to accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These types of accounts include, among others, accounts payable, accounts receivable, goodwill, deferred tax liability and future interest expense. For example, a company delivers a product to a customer who will pay for it 30 days later in the next fiscal year, which starts a week after the delivery. The company recognizes the proceeds as a revenue in its current income statement still for the fiscal year of the delivery, even though it will get paid in cash during the following accounting period. The proceeds are also an accrued income on the balance sheet for the delivery fiscal year, but not for the next fiscal year when cash is received. Similarly, a salesperson, who sold the product, earned a commission at the moment of sale. The company will recognize the commission as an expense in its current income statement, even though the salesperson will actually get paid at the end of the following week in the next accounting period. The commission is also an accrued expense on the balance sheet for the delivery period, but not for the next period the commission is paid out to the salesperson.
Accrual
In finance, an accrual (accumulation) of something is the adding together of interest or different investments over a period of time.
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"accrual." Kamus.net. STANDS4 LLC, 2024. Web. 20 Apr. 2024. <https://www.kamus.net/english/accrual>.
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