Asked by Mason Smith on May 01, 2024
Verified
Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded.
Accruals
Accounting adjustments for revenues that have been earned but are not yet recorded in the accounts, and for expenses that have been incurred but are not yet recorded.
Incurred
This term refers to the recognition of costs or expenses in accounting when a company commits to them through its operations, regardless of when payment is made.
- Familiarize oneself with the concept and purpose behind the application of adjusting entries in accounting.
- Identify the principles of accrual accounting, including the recognition of revenues and expenses.
Verified Answer
LL
Lesia LysneMay 02, 2024
Final Answer :
True
Explanation :
Accrual accounting requires the recognition of revenues and expenses when they are earned or incurred, regardless of when the actual cash is exchanged. Adjustments for accruals are necessary to ensure that financial statements accurately reflect the company's financial position and performance.
Learning Objectives
- Familiarize oneself with the concept and purpose behind the application of adjusting entries in accounting.
- Identify the principles of accrual accounting, including the recognition of revenues and expenses.