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Revenue and Cost Accruals

Revenue and Cost Accruals is a way of distributing the revenue and cost accruals into periods where the revenue and cost should have been taken.

For example, if you pay yearly Insurance of 1000 in January. You Credit the Bank Account and Debit would be an accrued balance account in the assets section.

Then at the end of the year, you need to Accrual this expense from your accrued balance account into the expense account for insurance to be distributed to 12 periods.