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Fundamentals of Accounting – Accrual concept

April 27, 2019 by admin Leave a Comment

The measurement of accounting income is also subject to the accrual concept. At the end of the accounting period, when the final accounts are prepared there may be many business activities at different stages of progress. Some of the goods might be lying unsold, some work may be slit I in progress, money may have still to be collected from the debtors etc. In accounting, the revenue is generally treated to be realised when the goods or services are furnished to the customers and not when cash or other valuable consideration has been received from them. It may be possible that some of the items fr which the revenue has been treated as realised may not result in any revenue on account of subsequent non-payments. Thus, the income disclosed by the Income Statement may not be the real income of the business.

Filed Under: Accounting Tagged With: accounting income, accounting period, Accrual Concept, Fundamentals of Accounting

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