Actual vs. Accrual: What's the Difference?
Edited by Harlon Moss || By Aimie Carlson || Updated on November 12, 2023
Actual refers to existing in fact; real. Accrual refers to the accumulation or increase of something over time, especially payments or benefits.
Key Differences
Actual refers to something that is real, existing in fact, and not merely possible or theoretical. It is used to describe what is true or real at the moment. Accrual, on the other hand, is a term often used in finance and accounting, referring to the accumulation or increase of something over time, such as interest, expenses, or revenues, irrespective of actual payment or receipt.
In usage, actual is often employed to emphasize the reality of a situation as opposed to what was expected or planned. For example, the actual cost of a project might differ from its estimated cost. Accrual, in contrast, is used specifically in the context of accounting and finance to denote the way income or expenses are recorded when they are earned or incurred, not necessarily when the money changes hands.
The term actual is broadly used across various contexts to describe tangible, existing conditions or facts. It is a versatile term that can apply to a wide range of real-world scenarios. Accrual is more specialized, primarily used in financial contexts to describe the recognition of financial transactions prior to the exchange of cash.
Actual can be used in a comparative context, to differentiate between the 'actual' and the 'expected' or 'predicted' states. It emphasizes factual existence. Accrual, however, deals with the concept of recognizing economic events in certain periods irrespective of the actual cash transactions, playing a crucial role in the accrual basis of accounting.
Actual is a term that can be applied in general conversations to describe real-life situations or facts, making it a common part of everyday language. Accrual is a term with specific technical use, primarily within the realms of business, accounting, and finance, and might not be commonly found in everyday casual conversations.
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Comparison Chart
Definition
Existing in fact; real.
Accumulation or increase over time.
Usage Context
General, across various contexts.
Finance and accounting specific.
Emphasis
Reality or factual existence.
Recording of financial transactions over time.
Comparative Nature
Often used to compare actual vs expected.
Used to recognize economic events regardless of cash flow.
Commonality in Speech
Common in everyday language.
More technical and specific to finance.
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Actual and Accrual Definitions
Actual
Existing in fact; real.
The actual number of attendees exceeded our expectations.
Accrual
The accumulation or increase of something over time.
Interest accrual on the savings account is calculated monthly.
Actual
Not merely possible or theoretical.
The actual results differed from the forecasts.
Accrual
The process of accumulating interest or benefits.
Accrual of vacation days happens every month.
Actual
Tangible or factual.
His actual expenses were much higher than projected.
Accrual
Gradual increase or accumulation of assets or liabilities.
The company's accrual of debt was a concern for investors.
Actual
Reflecting current or true conditions or situations.
The actual performance of the product was impressive.
Accrual
In accounting, recognition of revenue or expenses when earned or incurred.
The accrual of expenses is recorded even if the cash hasn't been paid.
Actual
Real as opposed to imagined or assumed.
The actual danger was less than what was feared.
Accrual
The act of accumulating something gradually over time.
The accrual of knowledge is essential for expertise in any field.
Actual
Relating to a person's acts or deeds; active, practical
Accrual
The act or process of accumulating; an increase.
Actual
Existing in reality, not just potentially; really acted or acting; occurring in fact.
The actual cost of goods;
The actual case under discussion
The actual government expenses dramatically exceed the budget.
Accrual
Something that accumulates or increases.
Actual
In action at the time being; now existing; current.
Accrual
An increase; something that accumulates, especially an amount of money that periodically accumulates for a specific purpose
Accrual
(accounting) from the creditor's viewpoint, a charge incurred in one accounting period that has not been, but is to be, paid by the end of it.
Accrual
Accrument.
Accrual
The act of accumulating
FAQs
Does actual imply truthfulness?
Yes, actual implies something is factual and true.
Is actual always based on tangible evidence?
Yes, actual refers to situations or facts that are real and tangible.
Is accrual based on cash transactions?
No, accrual accounting recognizes transactions regardless of cash movement.
Can accrual be used outside of accounting?
While commonly used in accounting, accrual can apply to any accumulation over time.
Does actual differ from theoretical?
Yes, actual refers to what is real, as opposed to what is theoretical or hypothetical.
Can the actual situation change over time?
Yes, the actual situation can change as new facts or conditions emerge.
Is actual synonymous with 'current'?
Actual can imply current, but it mainly focuses on the factuality of a situation.
How is accrual beneficial in accounting?
Accrual accounting provides a more accurate financial picture by recording revenues and expenses when they occur.
Is accrual accounting mandatory for all businesses?
Not for all, but it is required for publicly traded companies and certain others.
Can actual be subjective?
Actual is typically objective, based on real and factual evidence.
Does accrual always involve financial matters?
Primarily, but it can also refer to the non-financial accumulation, like benefits.
Is accrual a continuous process?
Yes, accrual is the continuous accumulation or recognition of items over time.
Can actual refer to physical objects?
Yes, actual can refer to physical, tangible objects.
Is actual used more in everyday language than accrual?
Yes, actual is more common in everyday language, while accrual is more technical.
Does accrual have an end point?
Accrual can have an end point, like when a financial period ends or a transaction is settled.
Can accrual be negative?
Yes, accrual can be negative, as in the accumulation of liabilities or expenses.
Does actual have different meanings in different contexts?
The core meaning of actual as 'real' or 'factual' remains consistent across contexts.
Can actual be used in legal contexts?
Yes, actual is often used in legal contexts to refer to factual situations or evidence.
Can accrual apply to personal finance?
Yes, concepts like the accrual of interest apply to personal finance.
Is the accrual method more complex than cash accounting?
Accrual accounting is generally more complex due to the timing of revenue and expense recognition.
About Author
Written by
Aimie CarlsonAimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.
Edited by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
