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LSDefine

Simple English definitions for legal terms

accrual method of accounting

Read a random definition: Social Security Administration

A quick definition of accrual method of accounting:

The accrual method of accounting is a way that big businesses keep track of their money. It means they report all the money they expect to get and all the money they owe, even if they haven't paid or received it yet. This helps them have a better idea of how much money they have at any given time. The government makes most big businesses use this method because it's more accurate. Some businesses use a different method called the cash method, which only reports money when it's actually paid or received.

A more thorough explanation:

The accrual method of accounting is a way that most large businesses use to report their liabilities and expected income. This method requires businesses to report all economic transactions, whether liabilities or income, when all the events have occurred which fix the right to receive such income. This method is used by businesses with very complex and numerous transactions occurring.

For example, if a company signs a sale contract to purchase a warehouse but has not paid yet, the accrual method would require the company to report the transaction because it is likely to occur. However, the cash method would not require reporting the transaction until the payment occurred.

The Internal Revenue Service (IRS) requires most businesses with income above $25 million to use this method of accounting because it more accurately reflects the current financial status of businesses. Some businesses also use the cash method of accounting which only reports transactions when they occurred.

accretion | accrue

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General

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Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
BulbasaurNoLikeCardio
7:51
@texaslawhopefully: best prices and only fast food that doesn't make me sick
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