what is the purpose of accruals 
the purpose of accruals is to ensure that a company s financial statements accurately reflect its true financial position this is important because financial statements are used by a wide range of stakeholders to evaluate the financial health and performance of a company including investors creditors and regulators a company s financial statements would only reflect the cash inflows and outflows without accruals rather than the true state of its revenues expenses assets and liabilities accruals provide a more accurate picture of a company s financial position by recognizing revenues and expenses when they re earned or incurred rather than only when payment is received or made 