Question: Accrued items and deferred (unearned or prepaid) items. Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. How

Accrued items and deferred (unearned or prepaid) items.

Generally accepted accounting principles require the use of accruals and deferrals in the determination of income. How is income determined under the accrual-basis of accounting? Include in your answer what constitutes an accrued item and a deferred (prepaid) item, and give appropriate examples of each.

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