TERMIUM Plus®

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ACCRUAL ACCOUNTING PERSPECTIVE [1 record]

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Alphabetical list of terms

Record 1 2001-05-31

English

Subject field(s)
  • Accounting
  • Financial and Budgetary Management
CONT

Larger companies, particularly publicly held corporations, are required to use the accrual basis of accounting. From the accrual accounting perspective, the purpose of the expenditure determines whether or not the expenditure is an expense at the time of payment. For example, if a business expends cash for office supplies, no expense occurs until the office supplies are used in business operations. The spending of cash is not the "critical event". Thus, when a business buys postage stamps, it has purchased an "asset", that is, an item that has a future potential to benefit the company. If the stamps are used to mail an invoice to a customer or supplier, then the "expense" occurs because the stamp (asset) has no further benefit for the company.

French

Domaine(s)
  • Comptabilité
  • Gestion budgétaire et financière

Spanish

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