Accrual basis of accounting
Briefly describe the accrual basis of accounting by describing the principles involved.
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The accrual basis of the accounting demonstrate the effects of the economic transactions and events in period in that those effects happen, even if the resulting cash receipts as well as payments happen in a different period. It is based upon the accruals concept that is the principle that revenue and costs are predictable as they are earned and acquired not as cash is received or paid (realization concept), and they are harmonized with one another (matching concept) and dealt with in income statement of period to which they relate (period concept).
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