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A Guide To Accruals Accounting With Definition And Examples
in Bookkeeping
GAAP mandates that public companies use accrual accounting to ensure their financial statement accurately reflect their financial performance and position. The accounting journal is the first entry in the accounting process where transactions are recorded as they occur. Accrual accounting uses the double-entry accounting method, where payments or reciepts are recorded in two accounts at the time the transaction is initiated, not when they are made. Accrued expenses, also known as accrued liabilities, occur when a company incurs an expense it hasn't yet been billed for. Essentially, the company received a good or service that it will pay for in...
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