The practice of record keeping by which income is recorded when earned and expenses are recorded when incurred, even though the cash may not be received or paid out until later.

A current liability representing the amount owed by a business to a creditor for the merchandise or services purchased on open account.

Money owed a business enterprise for merchandise bought on open account.

Accrual basis of accounting is based upon generally accepted accounting principles. It recognizes income when it is earned and not when it the cash received and recognizes expenses when they are owed and not when you pay them. Accrual basis of accounting includes Accounts Receivable, Accounts Payable, and Inventory. The practice of record keeping by which income is recorded when earned and expenses are recorded when incurred, even though the cash may not be received or paid out until later.

These are expenses incurred during an accounting period for which payment has not been made.

Income earned during a fiscal period but not actually received during that fiscal period.

These are liabilities which have occurred, but have not been paid during an accounting period. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable.