Business Terms and Jargon Explained
What is Accruals BasisA method of recording transactions to relate them to the period when the exchange of ownership of the goods, services or financial asset applies. For example, value added tax accrues when the expenditure to which it relates takes place, but HM Revenue and Customs receive the cash some time
later. The difference between accruals and cash results in the creation of an asset and liability in the financial accounts, shown as amounts receivable or payable.
© Crown Copyright. Material taken from National Statistics website: www.statistics.gov.uk. Reproduced under the terms and conditions of the Click-Use Licence.
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Term created / updated 2007-01-19 00:19:32
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