A business must record an expense whenever cash is paid to acquire a resource.

A business must record revenue in the period cash is collected from a customer.

When a company reports revenue, it must also recognize the expenses associated with earning the revenue.

Accrual basis accounting follows the accounting principle of matching.

Revenue is reported when a company earns income by delivering goods to or performing services for a customer.

Under accrual basis accounting, a company might record the payment to buy a resource and the expense associated with using the resource in different periods.