Accrual adjustments pair:

Question

Quizplus · Accepted Answer

Accrual adjustments pair assets with revenues and liabilities with expenses. This is because accrual accounting recognizes revenue when it is earned (regardless of when payment is received) and expenses when they are incurred (regardless of when payment is made). Therefore, assets (such as accounts receivable) are linked to revenue (as they represent future inflows) and liabilities (such as accounts payable) are linked to expenses (as they represent future outflows).

Accrual Adjustments Pair