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Business Definition for: accrual basis
Dictionary of Finance and Investment Terms
accrual basis

accounting method whereby income and expense items are recognized as they are earned or incurred, even though they may not have been received or actually paid in cash. The alternative cash basis accounting.

Dictionary of Banking Terms
accrual basis

accounting system in which revenues and expenses are recognized in the period in which they arise, regardless of when the cash for the revenue or the expenditure actually occurs. Accrual accounting is the only basis of accounting approved under Generally Accepted Accounting Principles and is used by public companies and most privately owned companies.

See also cash basis
Related Terms:
cash basis

Accounting: method that recognizes revenues when cash is received and recognizes expenses when cash is paid out. In contrast, the accrual method recognizes revenues when goods or services are sold and recognizes expenses when obligations are incurred. A third method, called modified cash basis, uses accrual accounting for long-term assets and is the basis usually referred to when the term cash basis is used.
Series EE Savings Bonds: paying the entire tax on these bonds when they mature. The alternative is to prorate the tax each year until the bonds mature.

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