A business example
A business receives a ₹12,000 maintenance service in March, but the supplier invoices it in April.
Service received
The work relates to March under the example's accounting assumptions.
March close
The business records the expense and an accrued liability.
Invoice arrives
The April invoice is matched to the accrual so the expense is not counted twice.
What this shows
The service period drives this example's expense recognition. Invoice receipt and cash payment are later events to reconcile.
What it is often confused with
The timing of cash payment does not alone determine the accounting period.
What to look at in your business
Keep the calculation and later invoice matching so estimates can be adjusted.
Context and further reading
This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.
Kosha.Services · Updated 2 October 2026