What is the main difference between accrual and deferral adjustments?
A)Deferral adjustments are required to update previously recorded items whereas accrual adjustments are required to include items not previously recorded.
B)Deferral adjustments are required under the cash basis of accounting whereas accrual adjustments are required under the accrual basis of accounting.
C)Deferral adjustments are required to include items not previously recorded whereas accrual adjustments are required to update previously recorded items.
D)Deferral adjustments are used for expenses whereas accrual adjustments are used for revenues.

Question

Quizplus · Accepted Answer

Deferral adjustments are needed when an asset (or liability)has already been recorded and it needs to be updated to show that some of its benefits have been used up (or its obligations have been fulfilled).Accrual adjustments are needed when revenue has been earned (but not yet recorded)or expenses have been incurred (but not yet recorded).

What Is the Main Difference Between Accrual and Deferral Adjustments