Accrual-Basis Accounting: Transactions recorded in the periods in which the events occur. 1• Companies recognize revenues when they perform services rather than when they receive cash 2• Expenses are recognized when incurred rather than when paid (when assets are "used") ...
Accrual Basis of Accounting Revenues are recognized when earned, regardless of the period of cash collection Expenses are recognized when incurred, regardless of the period of cash payment. Cash Basis of Accounting Revenues are recognized when cash is received. ...