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Problem 1: The biggest distinction between accruals and deferrals is
Option a. one emphasizes conservatism while the other promotes aggressive accounting positions.
Option b. how long a company must wait until the collection of cash occurs.
Option c. with accruals, no record of the activity has been made prior to the adjustment process, and with deferrals, the activity has already been recorded in the accounting records, but the proper amount of revenue or expense has not been recognized.
Option d. adjustments are necessary for accruals, whereas, adjustments are not necessary for deferrals.
Financial Statement Analysis and Preparation
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