Accrual (Transaction Type)
Definition
An accounting entry that records revenue earned or an expense incurred in a period before the corresponding cash receipt or payment occurs. Accruals are required under accrual accounting to ensure that the income statement reflects economic activity in the period it occurs rather than when cash moves. Accruals are distinct from deferrals: a deferral records a cash receipt or payment in a later period than when cash moves, because the revenue has not yet been earned or the expense not yet incurred.
Common Misapplication
The most common misapplication is confusing accruals with deferrals. Cash received in advance of service delivery is a deferral, not an accrual, and must be recorded as a liability rather than as revenue.
FFI Standard Reference
This term is defined and applied in Book 1, Section 1.4: The Accounting Integrity Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Accrual (Transaction Type). https://ffistandard.org/glossary/accrual-transaction/. 2026.