Accrual Accounting

The accrual accounting method measures the performance and financial position of an organization by recognizing financial events regardless of when actual cash is received. For example, with the accrual method, income is recorded when the sale occurs regardless of when payment is received. Expense is recorded when goods or services are received, even though payment for the goods or services may not occur until later.

Why is accrual accounting important?

The accrual method provides a more accurate picture of the organization's financial situation because income is recorded on the books when it is truly earned regardless of when it is received. Likewise, expenses are recorded when they are incurred regardless of when they are paid. Income earned in one period is accurately matched against the expenses that correspond to that period. This provides a better picture of the organization's net profits for each period. It simply provides a clearer picture of the financial status of the organization for a given fiscal period.

Definitions of Auxiliary and Service Center Accounts, and Qualifications for a Reporting Organization

Please see ASOP (Auxiliary Standard Operating Procedure) 2.0 – Definition of Reporting Auxiliary and Service Centers

Use of the Auxiliary Voucher

Please see ASOP 3.0 – Accruing vs. Adjusting Entries—Auxiliary Voucher Use.

Auxiliary Voucher Approval Process and Deadlines

Please see ASOP 14.0 – Auxiliary Voucer Timeliness

Use of Financial Reports

Please see Navigation to IUIE and Other Useful Reports

Quarterly Variance Analysis
(Required of Reporting Auxiliary and Service Units)

Please see ASOP 17.0 – Quarterly Variance Analysis

Year End Closing Process

Please see ASOP 44.0 – Balance Sheet Backup for Year-End