Accounting

AccrualsAccruals (or aggregation-type adjusting entries) involve both write downs and taxs and are associated with the first scenario mentioned in the gate to this topic: * Nothing has been entered in the accounting records for certain expenditures and/or revenues, scarcely those expenses and/or revenues did occur and must be include in the current extents income statement and balance sheet.1.Accrual occurs before a stipend or receipt2. An accrual of an expense refers to the reporting of an expense and the related liability in the period in which they occur, and that period is prior to the period in which the payment is made.An example of an accrual for an expense is the electricity that is used in celestial latitude, except the payment will non be made until January.An accrual of revenues refers to the reporting of revenues and the related receivables in the period in which they are earned, and that period is prior to the period of the cash receipt. An example of the accrual of revenues is the interestingness earned in December on an investment in a government bond, but the interest will not be have until January.3. Accrual means we recognize revenue that has been earned and expenses (resources that have been consumed) for which cash will be received or paid in a future period.



 
| Deferrals
Deferrals or corner-type adjusting entries can pertain to both expenses and revenues and refer to the second scenario mentioned in the introduction to this topic: * Something has already been entered in the accounting records, but the amount needs to be divided up among two or more accounting periods. 1. A deferral occurs after a payment or receiptA deferral of an expense refers to a payment that was made in one period, but will be reported as an expense in a later period. An example is the payment in December for the six-month insurance premium that will be reported as an expense in the months of January through June.A deferral of revenues refers to receipts in one accounting...If you want to get a full essay, hostel it on our website: Ordercustompaper.com



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