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The purpose of a boundary is to
Accrual
An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash transaction happens.
Incremental Borrowing Rate
The interest rate a company would have to pay if it borrows funds, a critical component in lease accounting.
Balance Sheet
A financial statement that provides a snapshot of a company’s financial position at a specific point in time, showing assets, liabilities, and shareholder equity.
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