What are Accruals?

Accruals mean that income and expenses are posted in the periods they are earned or spent in. This means that through the accrual of the profit and loss items, income and expenses fall under the correct period in the accounting which provides a more accurate result for the current period.
This provides the possibility to split up an income or expense which goes on for a longer period into several parts and to then post these parts over several months, quarters, or years. 

This implies that income should be taken up as revenue in the period it is actually earned, even when the payment occurs in another period. Similarly, expenses should be taken up as costs in the period they are spent, even when the payment takes place in another period.

A revenue is an accrued income and a cost is an accrued expense.

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