Concept explainers
a.
Accrual Accounting
Accrual accounting refers to the accounting system where revenues and expenses are recognized and recorded as and when it is earned or expenses irrespective of the exchange of cash. Accrual accounting presents a true and fair view of the state of affairs of the business than the cash basis of accounting. Accrual basis of accounting affirms the time period concept, revenue recognition concept, and matching principle of accounting as required by Generally Accepted Accounting Principles (GAAP).
To Identify: The date on which the revenue was earned, and to determine if revenue is earned on the same day, cash was received.
b.
To Identify: The date on which the revenue was earned, and to determine if earnings occur on the same day, cash was received.
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