What does “Accrual basis” mean in bookkeeping?

Accrual basis: A way of keeping books where income counts when it is earned and expenses when they are incurred, whether or not money has moved yet. This course uses accrual basis.

ExampleAn invoice counts as a sale on the day it's sent, before the customer pays.

Written for US bookkeeping. Last reviewed November 5, 2026. See all 100 terms.