Accrual basis of accounting

Accrual basis of accounting Revenues are recorded when they are earned (when the sale takes place) rather than when cash is received on the sale. Likewise, expenses are recorded when they are incurred rather than when they are paid.

Definitions

According to Managerial Accounting by Braun, Tietz (5th edition),

Accrual basis of accounting. Revenues are recorded when they are earned (when the sale takes place) rather than when cash is received on the sale. Likewise, expenses are recorded when they are incurred rather than when they are paid.