Accruals, such as estimates of bad debt and income tax expenses, are not usually as precise on interim financial reports as they are on year-end financial reports.

Question

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Interim financial reports cover a shorter period of time and may be based on estimates and assumptions that are subject to change. As a result, accruals on interim reports may not be as precise as those on year-end reports, which cover a full year and can rely on more accurate and finalized data.

Accruals, Such as Estimates of Bad Debt and Income Tax