The accruals concept states that income and expenses should be recorded in the period to which they relate, not when cash is received or paid.

This means:

Revenue is recorded when it is earned

Expenses are recorded when they are incurred

It helps in:

Calculating correct profit for a period

Matching income with related expenses

Showing a true financial position

Example:
Electricity used in March but paid in April is recorded as an expense in March.

In simple terms, the accruals concept means recording income and expenses in the correct accounting period.