In the context of accounting, when is revenue recognized under accrual accounting?

Revenue recognition under accrual accounting is determined by the principle that revenue should be recognized when it is earned, which typically occurs when goods are delivered or services are rendered. This means that the transaction is considered complete from an accounting perspective at the point when the seller has fulfilled their part of the agreement, regardless of when cash is actually received. This principle aligns with the matching concept in accounting, which aims to align revenues with the expenses incurred to generate those revenues.

Accrual accounting aims to provide a more accurate financial picture of a company's performance during a specific accounting period, reflecting economic events as they occur rather than when cash changes hands. This approach allows for better matching of revenue and expenses, offering a clearer view of the company's profitability during a given time frame.