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Accruals Accruals are earned revenues and incurred expenses that have an overall impact on an income statement. They also affect the balance sheet, which represents liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense.

Breaking it Down: The use of accrual accounts has greatly increased the amount of information on accounting statements. Before the use of accruals, accountants only recorded... Read More