Accruals

Okay kiddo, so let me tell you about something called accruals.

You know how sometimes you do a chore for someone, like cleaning your room, but they don't give you money right away? That's kind of like what accruals are.

Accruals are when a company has done work or provided goods or services to someone else but they haven't gotten paid for it yet. But the company still needs to keep track of how much money they are owed.

So, let's say a company called XYZ sells some products to another company called ABC. But ABC doesn't pay right away, so XYZ has to keep track of how much they are owed. They do this by recording the sale in their books, even though they haven't received the money yet.

This way, XYZ can keep track of all the sales they have made and all the money they are owed, even if they haven't actually received the money yet.

I hope that helps you understand what accruals are!