GAAP require the use of accruals and deferrals in the determination of income. Required: 1. Explain how

Question:

require the use of accruals and deferrals in the determination of income.
Required:
1. Explain how accrual accounting affects the determination of a company's income. Include in your discussion what constitutes accrued and deferred revenues and expenses, and give appropriate examples of each.
2. Contrast accrual accounting with cash accounting.
GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...