What does accrual mean in accounting?

"Accrual" means recording transactions when they happen, rather than when their related cash flows happen. In accrual accounting, you record revenues when they're earned, and not necessarily when you get paid for them. You record expenses when you earn the benefits from them, rather than when you pay them.

Revenues are accrued you have earned them from customers, even if you haven't gotten paid for them yet. For example, if you sell and deliver $200 worth of goods to a customer in December, but won't get paid until January, you can record $200 worth of sales and $200 worth of additional accounts receivable in December.

Expenses are accrued when you earn the benefits from them, even if you haven't paid them yet. For example, if you use $100 worth of electricity in December but won't pay for it until January, you need to record a $100 expense and also a $100 liability in December.

Most generally accepted accounting principles around the world are based on the accrual method.