Through the use of accruals and deferrals,accrual accounting

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Accrual accounting produces an earnings number that smoothes out the unevenness in year-to-year cash flows by using accruals and deferrals to match revenue and expenses with the period in which they are earned or incurred, rather than when they are actually paid or received. This helps to provide a more accurate picture of an organization's financial performance over time, even if there are fluctuations in cash flow from year to year.

Through the Use of Accruals and Deferrals,accrual Accounting