Nov 3, 2025

Accruals

• Accruals are revenues or expenses that have been earned or incurred but not yet recorded in cash.

How do I remember it?

• Think of “Accrual = Occurred.”

If something has occurred, the business earned revenue or used a service so you must record it even if no cash moved yet.

Real world example

• Accrued Expense:

Expense incurred, not yet paid

Wages owed, unpaid rent

Expense Dr / Liability Cr

• Accrued Revenue:

Revenue earned, not yet received

Completed service, not yet invoiced Asset 

(A/R) Dr / Revenue Cr