Explain the Difference Between

question 79

Essay

Explain the difference between
(a) Accrued revenues and unearned revenues.
(b) Accrued expenses and prepaid expenses.
(c) Give an example of each.

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Definitions:

Direct Method

A cash flow statement compilation approach focusing on the specific cash inflows and outflows, without the need to adjust net income for non-cash transactions.

Day-to-Day Operations

The routine activities required for the running of a business on a regular, daily basis, involving processes, resources, and staff management.

Indirect Method

A method used in the preparation of cash flow statements which adjusts net income for transactions that affect reported net income but did not involve cash.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered or used but not yet paid for.