| Accrual
Accounting |
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An
accounting method which measures the performance and position of a
company by recognizing economic events regardless of when cash transactions
happen.
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The
opposite is the cash basis of accounting.
For
example, if you buy a stereo on credit the company you buy from would
still recognize the event as a transaction under accrual accounting.
Compare this to the cost basis where no events are recognized unless
cash has traded hands. |
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Dictionary
