Amit Kumar Singh and Co

Loading

Tag Financial Reporting

Accounting

📊 Accrual (Due) Basis of Accounting – Meaning, Examples & Importance

The Accrual Basis of Accounting records income and expenses when they are earned or incurred, not when cash is actually received or paid.

✅ Key Points:
Income is recorded when earned, not when received
Expenses are recorded when incurred, not when paid
Gives a true picture of financial performance
Follows the Matching Principle in accounting
Required under GAAP, Ind AS, and for certain businesses under the Income Tax Act
💼 Why Use Accrual Accounting?
Better financial planning
More accurate income statements
Required for loans, audits, or funding
Complies with accounting regulations
Whether you’re running a small business or managing a growing enterprise, accrual accounting helps you see the real performance of your operations.