Can someone please explain me the concept of realization and accruals? The core study material says it differently to what I see on internet.
Hi Realisation : income is recognised in accounts when it is earned, regardless of when cash actually changes hands. So, if a company sells goods worth 100 during the year, it shows 100 as revenue in its income statement, even if the customer bought on credit and hasn't actually paid the 100 cash for the goods yet. Accruals : similar idea but relating to expenses (ie cash outgoes as opposed to income)
