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Accrual basis of accounting; Accrual concept; Accrual method; Accrual system
Accrual accounting is “a basis of accounting according to which all the transactions and events are recorded when they occur, without a relation with cash inflow or outflow. Therefore, the operations and events are recorded in the accounting records and recognized in the set of financial statements of the periods to which they relate. The elements recognized under accrual accounting are assets, liabilities, net assets/equity, revenue, and expenses” (IPSASB 2006).
The Accounting Methods
The importance of the accounting information presented in the financial statements for decision-makers is very well known in practice as well as in literature. The financial statements represent the result of recording transactions in a sequential and systematic manner following a set of rules, prescribed in the accounting method. Most entities typically use one of two basic accounting methods to record...
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