What is deferral and accrual?
submitted by Tim Burr

do_it_or_dont

They're different ways of matching income and expenses to the correct period.

A deferral doesn't recognize revenue or expenses right away. You'd wait to some future time, like when you receive payment for services you haven't done yet.

An accrual, on the other hand, records revenue and expenses that have been incurred but haven't been paid yet.

kelliam

Those are two different things. Deferrals are when you wait to record income or expenses until later. You'd do that with prepaid rent. Accruals are when you record revenues / expenses that have happened but you haven't actually paid or received cash for yet. You'd do that with accrued salaries.