Accruals are accounting entries that record expenses or revenue in the financial statements when they are incurred or earned, rather than when they are paid or received. Accruals are based on the accrual accounting method, which is the standard method of accounting used by most businesses.

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The accrual accounting method requires companies to record revenue when it is earned, even if the customer has not yet paid, and to record expenses when they are incurred, even if the company has not yet paid for them. This is in contrast to the cash accounting method, which records revenue and expenses when cash is received or paid.

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Accruals can include a wide range of items, such as salaries, interest, rent, taxes, and other expenses or revenue that have been incurred or earned but have not yet been paid or received. Accruals are typically recorded at the end of a reporting period, such as a month or a quarter, and are used to ensure that financial statements accurately reflect a company's financial position and performance.

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Accruals are an important accounting concept that helps companies to accurately report their financial results and make informed business decisions. By recording expenses and revenue when they are incurred or earned, rather than when they are paid or received, companies can provide a more accurate picture of their financial position and performance, which can help them to make better decisions and improve their long-term financial health.

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