About accruals

Accrual means to recognize an exp , when we are certain about its occurane rather than on payment basis ... Hope this may help you ...

As per Accrual System of Accounting, Expenses and Income are recognised in the period in which they accrue/relate to (in the period in which they become payable or are receivable) irrespective of the fact whether cash has been received/paid or not.

For instance, If a company has paid Salary Expense for the month of March in the month of April, the salary expenses are recognised in the month of March because they pertain to march even though they are paid in April. (In contrast, Cash system of accounting would have recognised the expenses in April).

The entry for above would be -

Salary Account dr

      To Employees Account/ salary Payable Account. 

The above entry would be passed in the month of March. 

Similar Treatment is given for income accrued but not received. 

As per Accrual System of Accounting, Expenses and Income are recognised in the period in which they accrue/relate to (in the period in which they become payable or are receivable) irrespective of the fact whether cash has been received/paid or not.

For instance, If a company has paid Salary Expense for the month of March in the month of April, the salary expenses are recognised in the month of March because they pertain to march even though they are paid in April. (In contrast, Cash system of accounting would have recognised the expenses in April).

The entry for above would be -

Salary Account dr

      To Employees Account/ salary Payable Account. 

The above entry would be passed in the month of March. 

Similar Treatment is given for income accrued but not received.