Asked by Megan kibby on Jun 16, 2024
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The accrual basis of accounting requires adjustments to recognize revenues in the periods they are earned and to match expenses with revenues.
Accrual Basis
A bookkeeping approach that recognizes income and expenses at the time they are accrued, rather than when the actual cash transaction occurs.
Adjustments
Modifications made to accounting entries to correct errors or allocate revenues and expenses to the appropriate accounting period.
Match Expenses
The accounting principle that requires expenses to be recorded in the same accounting period as the revenues that are earned as a result of those expenses.
- Comprehend the distinctions between accrual and cash accounting methods.
- Absorb the essential doctrines of recognizing income and correlating expenditures as per the matching principle.
- Acknowledge the importance of making adjustments at period-end to adhere to the principles of revenue and expense recognition.
Verified Answer
Learning Objectives
- Comprehend the distinctions between accrual and cash accounting methods.
- Absorb the essential doctrines of recognizing income and correlating expenditures as per the matching principle.
- Acknowledge the importance of making adjustments at period-end to adhere to the principles of revenue and expense recognition.
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