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Greetings to you
Today I found out that revenue is not recogized unless you earn it
I just wondered how this could be true since we make opening and closing accrual income and prepayments for an expense
If my question doesn’t seem clear please let me know so that I can type the question
The reason for having opening and closing accruals is to make sure we are showing the income earned, even if the cash has not yet been received. It is exactly the same logic as how we deal with expenses – we want the expense for the period whether or not the cash has been paid.
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