It is a method of reporting revenue and expense wherein revenue is reported when earned and expense is reported when incurred.
Question: It is a method of reporting revenue and expense wherein revenue is reported when earned and expense is reported when incurred.
If you are running a business, you need to know how to measure your income and expenses. One way to do that is by using the accrual basis of accounting. This is a method of reporting revenue and expense wherein revenue is reported when earned and expense is reported when incurred. This means that you recognize your income when you provide a good or service, not when you receive cash. Similarly, you recognize your expenses when you use a resource or incur an obligation, not when you pay cash. This way, you can match your income and expenses to the period in which they occur, and get a more accurate picture of your financial performance.
Comments
Post a Comment
let's start discussion