Entries for the accrual of unrecorded expenses and the accrual of unrecorded revenues are made prior to the associated cash flows.

Question

Quizplus · Accepted Answer

Accrual accounting requires the recording of revenue and expenses when they are earned or incurred, regardless of when cash is received or paid. Therefore, entries for the accrual of unrecorded expenses and revenues are made prior to the associated cash flows.

Entries for the Accrual of Unrecorded Expenses and the Accrual