The accounting principle upon which deferrals and accruals are based is
b. Matching Principle
c. Price-Level Adjustment
Accruals are those expenses incurred or services received but payments have not yet been made. A firm might have received services from workers or other third-party agents but have not made payments is the case of accruals.
Deferrals are those payments made or payments received for products or services not yet provided. Those incomes received from customers in advance to provide service or goods in the future are called deferred income.