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hello everyone im larry a professor of accounting and in this brief video id like to walk us through a straightforward example of an accrual specifically a journal entry for an accrual involving salaries or wages i found in the past that many students new to accounting have trouble understanding this concept and note that you can see similar examples to this in just about any financial accounting textbook now before we go further id recommend that you review the difference between accrual basis versus cash basis accounting you can probably just look this up on the internet or any accounting textbook should show this any financial accounting textbook but to quickly summarize the difference when a company is implementing cash basis accounting what theyre doing is only recording transactions when money moves that is specifically when payments go out or payments come in that is what happens with cash basis accounting however with accrual basis accounting a company recognizes or record