Accrual Method

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Accrual Method

Description and Definition of Accrual Method

The Accrual Method is a business method of accounting requiring income to be reported when earned and expenses to be deducted when incurred – rather than reporting income when you receive payment and expenses when you pay them. However, deductions generally may not be claimed until economic performance has occurred. The Accrual Method is usually used by most large corporations. If you own a business that maintains an inventory you are required to use the accrual method for purchases and sales.


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