Understanding Accounting
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Figure · FIG:foundational/accrual-basis-timing

Accrual recognition and cash settlement occupy different clocks

Compare accrued revenue and accrued expense with the later cash transactions that settle them.

Updated Sep 6, 2026 Review due Nov 7, 2026
A two-row comparison shows accrued revenue and accrued expense. Each row separates activity-period recognition from a later cash collection or payment that settles the related balance.
These examples assume revenue is earned with an unconditional payment right and expense is incurred but unpaid. Later cash settles the receivable or payable.
Detailed visual description

For accrued revenue, performing the service creates revenue and a receivable; later collection settles the receivable. For accrued expense, consuming the resource creates expense and a payable; later payment settles the payable. Neither later cash event repeats the earlier revenue or expense recognition.

Review apparatus

Visual provenance and review

Technique
ai specified svg
Role
explanatory
Review state
revised
Model source
google · google:gemini-2.5-pro
Rights
CC0-1.0 · Project-authored deterministic rendering of a reviewed model-assisted specification

Review notes

  • The real Google call correctly centered the separation between the economic-activity period and the cash period.
  • The raw proposal encoded unsupported timeline lanes as JSON strings and omitted required renderer fields, so it failed the deterministic renderer gate.
  • The accepted comparison-table specification preserves the two proposed accrual patterns without retaining the proposal's unnecessary example amounts.
Retained model-call description

scripts/figures/llm_spec.py constrained proposal using the complete C:accrual-basis-accounting record; the retained response contains the learning question, rationale, proposed specification, and fact-check list.

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