Question

plz explain the accrual concept of accounting​

Answer 1

7. Accrual Concept: Under the cash system of accounting, the revenues and expenses are recorded only if they are actually received or paid in cash, irrespective of the accounting period to which they belong. But under the accrual concept, occurrence of claims and

obligations in respect ofincomes or expenditures, assets or liabilities based on happening of any event, passage oftime, rendering o services, are recorded even though actual receipts or payments of money may not have -taken place. In respect of an accounting period. the outstanding expenses and the prepaid expenses and similarly the income receivable and the income received in advance are shown separately in the books of accounts under the accrual method.