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Accrual Concept Video Lecture | Accountancy Class 11 - Commerce

FAQs on Accrual Concept Video Lecture - Accountancy Class 11 - Commerce

1. What is the accrual concept in accounting?

Ans. The accrual concept in accounting is a principle that states that financial transactions should be recorded in the accounting books when they occur, rather than when the cash is received or paid. This means that revenues and expenses are recognized in the period in which they are earned or incurred, regardless of when the cash is received or paid.

2. How does the accrual concept affect financial statements?

Ans. The accrual concept has a significant impact on financial statements. It ensures that revenues and expenses are matched to the period in which they are incurred, providing a more accurate representation of a company's financial performance. This allows for better decision-making by users of financial statements, as they can assess the company's profitability and financial health based on the accrual basis of accounting.

3. Can you provide an example of how the accrual concept works?

Ans. Certainly! Let's say a company provides services to a customer in December but doesn't receive payment until January. Under the accrual concept, the revenue from the service would be recognized in December when the service was provided, even though the payment is received in January. This ensures that the revenue is matched with the period in which it was earned.

4. Does the accrual concept apply only to revenue recognition?

Ans. No, the accrual concept applies to both revenue recognition and expense recognition. It requires that expenses be recognized in the period in which they are incurred, regardless of when the cash is paid. This ensures that the expenses are matched with the revenues they help generate, providing a more accurate picture of a company's financial performance.

5. What is the difference between the accrual concept and the cash basis of accounting?

Ans. The accrual concept and the cash basis of accounting differ in terms of when revenues and expenses are recognized. The accrual concept recognizes them when they are earned or incurred, regardless of when the cash is received or paid. On the other hand, the cash basis of accounting recognizes revenues and expenses only when the cash is received or paid. The accrual concept provides a more accurate and comprehensive view of a company's financial performance, while the cash basis is simpler but may not reflect the economic reality of the business.

Related Exams

Commerce SSC CGL A Level

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May 25, 2025 Last updated

Video Description: Accrual Concept for Commerce 2025 is part of Accountancy Class 11 preparation. The notes and questions for Accrual Concept have been prepared according to the Commerce exam syllabus. Information about Accrual Concept covers all important topics for Commerce 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Accrual Concept.

Introduction of Accrual Concept in English is available as part of our Accountancy Class 11 for Commerce & Accrual Concept in Hindi for Accountancy Class 11 course. Download more important topics related with notes, lectures and mock test series for Commerce Exam by signing up for free.

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Video Lecture & Questions for Accrual Concept Video Lecture | Accountancy Class 11 - Commerce - Commerce full syllabus preparation | Free video for Commerce exam to prepare for Accountancy Class 11.

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Here you can find the meaning of Accrual Concept defined & explained in the simplest way possible. Besides explaining types of Accrual Concept theory, EduRev gives you an ample number of questions to practice Accrual Concept tests, examples and also practice Commerce tests.

	Accountancy Class 11 61 videos\|158 docs\|35 tests

Accountancy Class 11

61 videos|158 docs|35 tests

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