Two clocks, one transaction
Cash accounting emphasizes when cash is received or paid. Accrual accounting recognizes revenue when earned under the applicable recognition rules and expenses when the relevant economic events occur. The payment date can be earlier, simultaneous or later. Public-company financial statements generally use accrual accounting, but tax eligibility and rules are a separate question.
Morrow finishes a $900 repair in March and collects in April. Assuming the service satisfies its revenue obligation in March, March revenue is $900 and accounts receivable rises $900. April collection raises cash and reduces receivables; it does not create another sale.
Now suppose mechanics earn $500 in March but are paid in April. March includes wage expense and a payable. April payment reduces both cash and the payable. March profit from these items is $400 even though neither cash flow has yet occurred.
Why accrual helps
Comparing completed work with the resources used to perform it helps explain that period's performance. A cash-only view might show no activity in March and all the activity in April. Yet accrual earnings require estimates and do not prove collectability. Analysts read profit and cash together.
“Matching” is a helpful intuition, not permission to store any unwanted expense as an asset. A cost is capitalized only when the relevant recognition criteria are met. Future hopes alone do not turn failed advertising into a recognized resource.