What Is the Main Difference Between Accrual and Deferral Adjustments

question 23

Multiple Choice

What is the main difference between accrual and deferral adjustments?

• A)Deferral adjustments are required to update previously recorded items whereas accrual adjustments are required to include items not previously recorded.
• B)Deferral adjustments are required under the cash basis of accounting whereas accrual adjustments are required under the accrual basis of accounting.
• C)Deferral adjustments are required to include items not previously recorded whereas accrual adjustments are required to update previously recorded items.
• D)Deferral adjustments are used for expenses whereas accrual adjustments are used for revenues.

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Definitions:

Domestic Price

The price of a good or service within a country, influenced by local demand and supply among other factors.

International Trade Theory

encompasses the concepts and principles explaining the exchange of goods, services, and capital across national borders, focusing on patterns, benefits, and effects of trade.

Produces At

The specific point or condition under which production occurs, focusing on the level of output and the resources used.

Low Cost

Refers to products or services that are offered at a minimal financial expense, making them accessible to a wider range of consumers.