The accounting principle upon which deferrals and accruals are based is
Options
a. Conservatism
b. Matching Principle
c. Price-Level Adjustment
d. Cost
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The Correct Answer is b. Matching Principle
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Explanation
Accruals
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
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.
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MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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