Basis of accounting
[5] For a business invoicing for an item sold or work done, the corresponding amount will appear in the books even though no payment has yet been received.[6] The accrual basis is a common method of accounting used globally for both financial reporting and taxation.[8] However, the details of these tests and the timing of income recognition may vary depending on local tax laws and regulations.[7] The specifics of accrual accounting can vary across jurisdictions, though the overarching principle of recognizing revenue and expenses when they are earned and incurred remains consistent.Some forms of the modified cash basis record income when it is earned but deductions when expenses are paid out.