| Accrual Accounting | |
 An accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions happen. |
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 The opposite of this is cash accounting, which recognizes transactions only when there is an exchange of cash. But under accrual accounting, for example, if you buy a stereo on credit, the company you buy from would still recognize the event as a transaction. |
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 Advanced Financial Statement Analysis - Learn what it means to do your homework before investing in a company. Get a deeper understanding of the structure of financial statements and what they tell you about a company's performance and reporting practices. Operating Cash Flow: Better Than Net Income? - Differences between accrual accounting and cash flows show why net income is easier to manipulate. |
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