Accrual Basis Accounting Revenue & Expense Recognition On Income Statement

Revenue and expense deterimined (recognized) using accrual basis accounting (compared to cash basis), accrual based accounting reports revenues when earned regardless if cash payments have been received, report expenses when they occur regardless if cash payments have been made in contrast cash basis accounting reports revenues and expenses when cash has actually been received or paid, in accrual basis accounting there are these basic account types, starting with liability accounts (1) unearned revenue (deferred revenue) and (2) accounts payable (accrued expense), for asset accounts (3) accounts receivable (accrued revenue) and (4) Inventory, Prepaid Assets (deferred expense), use accrual accounting to allocate income and expenses to the period they actually occur, detailed accounting calculations with balance sheet and income statement (T Account) amounts showing expense and revenue recognition on the income statement by Allen Mursau