Accrual basis - Indian Laws - General

Accrual basis As per Black s Law Dictionary , 6th Edition Accrual basis . A method of accounting that reflects expenses incurred and income earned for any one tax year. In contrast to the cash basis of accounting, expenses do not have to be paid to be deductible nor does income have to be received to be taxable. Unearned income (e. g., prepaid interest and rent) generally is taxed in the year of receipt regardless of the method of accounting used by the taxpayer.