Accrual accounting is a method where companies record income and expenses when they are earned or incurred, even if the cash hasn't been exchanged yet. This gives a more accurate picture of a company's financial performance over a specific period.
For example, if you sell a product today but the customer won't pay you for 30 days, accrual accounting tells you to record that sale (as income) today, even though you haven't received the cash yet.
