Accrual is a term that is frequently used in accounting and finance. It refers to the accumulation of something over a period of time. Accrual is an important concept in accounting because it helps to ensure that financial statements accurately reflect a company’s financial position.
Definitions
Accrual can be defined as the accumulation of something over time, such as interest on a loan or unpaid wages. In accounting, accrual refers to the recognition of revenue or expenses that have been earned or incurred but have not yet been paid or received.
Origin
The word accrual comes from the Latin word “acculus,” which means “growth” or “increase.” The term was first used in accounting in the 19th century.
Meaning in different dictionaries
According to the Merriam-Webster dictionary, accrual is “the process or result of accruing something.” The Oxford English Dictionary defines accrual as “the accumulation or increase of something over time.”
Associations
Accrual is closely associated with the concept of accrual accounting, which is a method of accounting that recognizes revenue and expenses when they are earned or incurred, rather than when they are received or paid.
Synonyms
Some synonyms of accrual include accumulation, buildup, growth, and increase.
Antonyms
Antonyms of accrual include reduction, decrease, and decline.
The same root words
The root word of accrual is “accrue,” which means “to accumulate or grow over time.” Other words that share the same root include accrument, accruable, and accruer.
Example Sentences
- The company’s revenue recognition policy requires the accrual of revenue when it is earned, regardless of when it is received.
- The accrual of interest on the loan will increase the borrower’s total debt over time.
- The company’s accrual of expenses for the quarter was higher than expected, leading to a lower net income.