Tag: Accruals

  • The Accrual Basis: Matching Revenue to Expense

    The Accrual Basis: Matching Revenue to Expense

    The accrual basis of accounting is a fundamental principle mandated by Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). Essentially, it dictates that financial transactions must be recorded when they occur, regardless of when cash is exchanged. This system provides a more accurate picture of a company’s financial performance by properly matching…