Accrual method recognizes revenue at the point of sale and recognizes expenses when incurred.

Question

Quizplus · Accepted Answer

The accrual method of accounting recognizes revenue when it is earned, regardless of when payment is received, and recognizes expenses when they are incurred, regardless of when payment is made. This is in contrast to the cash method, where revenue and expenses are only recognized when cash is received or paid out, respectively.

Accrual Method Recognizes Revenue at the Point of Sale and Recognizes