Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 21 - No. 9)
What is the purpose of adjusting for 'accruals' in an Income and Expenditure account?
To ensure that the income and expenditure are correctly reflected for the period they relate to.
To record all cash transactions.
To show the organization's net assets.
To comply with accounting standards.
Explanation
Accruals are used to match revenues and expenses to the correct period (matching principle).
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