Accruals and Deferrals
In accrual accounting a financial transaction is recorded when it occurs but not when cash has been paid or received. This is because; the ownership of good in question has been transferred from the seller to the buyer. For example, many businesses opt to sell in credit so as to enhance their competitiveness in the market as well as to keep their loyal credit worth customers who may not have adequate cash to pay immediately in such cases a transaction should be recorded at the time the credit sale has been made.
Accruals are inevitable when making supplies because