The Accrual System of Accounting is the most widely used method of accounting in the business world. It’s based on the principle that revenue and expenses should be recognized when they are earned or incurred, rather than when cash is received or paid out. This means that transactions are recorded in the period they occur, not necessarily in the period they are settled. This system gives a more accurate view of a company’s financial position by providing an up-to-date picture of its revenues, expenses, assets and liabilities. By being able to better measure current performance and plan for future goals, businesses can make more informed decisions that help ensure long-term success.