Accountancy/Accruals

An accrual is the effect of receiving goods or services before cash payment. This will most often result in a liability on the company's books, usually as a payable. Another type of accrual results from recognizing revenues before payment. Note this does not include unearned revenue, which is a deferral. Sometimes a business uses a service (e.g. electricity) which it has not yet been invoiced for. The double entry for this is:

Later when this bill gets paid

It is possible for an accrual to be made for telephone call charges in the period while the line rental (paid in advance) is a prepayment.