Through the use of accruals and deferrals,accrual accounting

A) produces a cash flow number that smoothes out the unevenness in year-to-year earnings.
B) produces information about current cash receipts and payments.
C) enables management to estimate future free cash flows.
D) produces an earnings number that smoothes out the unevenness in year-to-year cash flows.

Accrual Accounting

The method of accounting that recognizes revenue when earned and expenses when incurred regardless of when cash transactions occur.

Deferrals

Financial transactions that are recognized in a later accounting period than the period in which they occur, such as prepaid expenses.

Accruals

Accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged, to reflect the true financial position of a company.