Accruals are "spontaneous, " but unfortunately, due to law and economic forces, firms have little control over the level of these accounts.

Question

Quizplus · Accepted Answer

Accruals are generated by the normal business activities of a firm, such as credit sales or unpaid expenses, and are not easily controlled by management. Additionally, external factors such as tax laws and economic conditions can also impact the level of accruals.

Accruals Are "Spontaneous, " but Unfortunately, Due to Law and Economic