The accrual basis needs numerous adjustments at the end of the accounting period.

Question

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The accrual basis of accounting recognizes revenue and expenses when earned or incurred, regardless of when the cash is received or paid. As a result, multiple adjustments are required at the end of the accounting period to ensure that revenue and expenses are accurately recorded for the period. These adjustments include accruals, deferrals, estimate revisions, and other corrections.

The Accrual Basis Needs Numerous Adjustments at the End of the Accounting