Читать книгу Reading Financial Reports For Dummies - Lita Epstein - Страница 71

If a company uses accrual accounting, it records revenue when the actual transaction is completed (such as the completion of work specified in a contract agreement between the company and its customer), not when it receives the cash. In other words, the company records revenue when it earns it, even if the customer hasn't paid yet. So the painter who finishes a job in 2021 but doesn't get the cash for that job until 2022 still reports the income on their 2021 taxes. They enter the income into the books when the job is completed.

Companies handle expenses in the same way. A company records any expenses when they're incurred, even if it hasn't yet paid for the supplies. For example, when a carpenter buys lumber for a job, they may likely do so on account and not actually lay out the cash for the lumber until a month or so later, when they get the bill.

All incorporated companies must use accrual accounting according to the generally accepted accounting principles (GAAP) because revenues are matched to expenses in the same month they occur. If you're reading a corporation's financial reports, what you see is based on accrual accounting.