Accruals

Accruals are amounts that are owed to third parties for which a business has not yet been invoiced. The total of accruals is shown in the balance sheet as part of creditors due less than one year. For example, where a business has not been invoiced by an advertising agency for its costs for the last three months of the year, it will show in its accounts an accrual for the estimated amount of the invoice.

 

reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u

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