Accruals is the everyday shorthand accountants use for accrued items and for the accrual-type adjusting entries that record them: revenue that has been earned, or an expense that has been incurred, before any cash, invoice or routine transaction has captured it. The main entry explains how these entries work and gives a worked example.
How the word is used in practice
In conversation the word is loose. A finance team "posting accruals" at month end is making adjusting entries for items such as unpaid wages, interest owed or earned, utility bills not yet received and services delivered but not yet billed. On the balance sheet, "accruals" often refers to the resulting liability balances, usually shown as accrued liabilities or accrued expenses, and sometimes also to accrued revenue on the asset side.
Analysts use the word in a related sense when they compare profit with cash flow. The gap between net income and operating cash flow is sometimes called the accrual component of earnings, and a large or growing gap can prompt closer review of how estimates are being made.
Many companies undo each accrual on the first day of the next period with a reversing entry, so that the actual bill or payment can be recorded normally when it arrives without counting the cost twice.