Accrual accounting is a method of accounting that records financial transactions when they are incurred, regardless of when payment is received or made. This method is in contrast to cash accounting, which only records transactions when payment is received or made.

In accrual accounting, revenue is recorded when it is earned, regardless of when payment is received, and expenses are recorded when they are incurred, regardless of when payment is made. This method provides a more accurate picture of a company's financial position, as it takes into account all financial transactions that have been incurred, regardless of when payment is received or made.

Accrual accounting is used by most companies and is required by generally accepted accounting principles (GAAP). This method is considered more complex than cash accounting, but it provides a more accurate picture of a company's financial position and performance.

In summary, accrual accounting is a method of accounting that records financial transactions when they are incurred, regardless of when payment is received or made. This method provides a more accurate picture of a company's financial position and performance, and is required by generally accepted accounting principles (GAAP).