# Useful Concepts

Below are some common terms and concepts used throughout our documentation that are important to understand.

# Accruals and prepayments

Accruals and prepayments (jointly referred to as adjustments) are the adjustments required on a monthly basis to adhere to the accruals principal (i.e. to record expenses in the month to which they relate not in the month when they are paid)

# Periods

Periods are accounting periods. The system is based on the assumption that accounting periods are monthly.

# Full reversal method

If a business has been created with the journal posting format set to Total, EasyAccrue will operate under the full reversal method. This means that all accruals and prepayments are fully reversed on the 1st day of the month following the period being worked on. This means that the adjustment will be the year to date

# Monthly movement method

If a business has been created with the journal posting format set to Movement, EasyAccrue will operate under the monthly movement method. This means that only monthly adjustments on accruals and prepayments are posted in each period.