INTERVIEW QUESTIONS ACCOUNTS GENERAL LEDGER DETAILS

Question: What is an accrual?

Answer: Accrual basis of accounting means that the costs or revenues of events are recognized in the period in which they occur, though the cash flows may take place in another accounting period.

Like for a period of July 05 - October 05, if the organization was due to receive 1000K from an individual X but has not recieved yet for some reason, will recieve in November 05. It would be still be accounted for in the period July 05 - October 05 and not the period starting from November 05.

Accrual basis of accounting means that the costs or revenues of events are recognized in the period in which they occur, though the cash flows may take place in another accounting period.

Like for a period of July 05 - October 05, if the organization was due to receive 1000K from an individual X but has not recieved yet for some reason, will recieve in November 05. It would be still be accounted for in the period July 05 - October 05 and not the period starting from November 05.
Source: CoolInterview.com

All the transaction which are outstanding or prepaid recorded in accrual basis like next year income and exp are also recorded if income due but not received till the accounting year close it is recorded. Source: CoolInterview.com

Accrual can be attribted to both Income and Expense. Accrual are those income or expense which has taken place in one period and the proceeding has not yet happened. The same will be recorded in the period it occurs although it will be realised at a later period. Salary outstanding to employee for expense and income from sale of asset due to receive are the examples of accrual Source: CoolInterview.com

An accrual is a way for businesses to track expenses or revenues that haven’t been accounted for yet, when they are incurred, even if money wasn’t exchanged.
If a business uses accrual accounting, it records revenue when the transaction is completed and not when it receives the cash. In simple terms — the company records revenue when it earns it, even if the customer hasn’t paid for it yet. Source: CoolInterview.com

If you have the better answer, then send it to us. We will display your answer after the approval.

Rules to Post Answers in CoolInterview.com:-

• There should not be any Spelling Mistakes.
• There should not be any Gramatical Errors.
• Answers must not contain any bad words.
• Answers should not be the repeat of same answer, already approved.
• Answer should be complete in itself.

Name :*
Email Id :*
Answer :*
Verification Code	Not readable? Load New Code
Enter the above shown code: *
	Inform me about updated answers to this question