accrualsdeferral
Accruals and deferrals are concepts in accrual basis accounting used to adjust financial statements at period end. Accruals recognize revenues and expenses when earned or incurred, regardless of when cash is received or paid. Deferrals postpone recognizing revenue or expense until a later period, even if cash has already changed hands. Both are accomplished through adjusting journal entries and aim to align reported results with the economic activity of the period. In some discussions the term accrualsdeferral is used informally to refer to the combined process of making such adjustments.
Accruals include accrued revenues and accrued expenses. Accrued revenue occurs when a service is performed or
Deferrals include deferred revenues and deferred expenses. Deferred revenue arises when cash is received before the
Adjusting entries for accruals and deferrals are a fundamental aspect of financial reporting under GAAP and