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Matching or Accrual
The accrual concept makes a distinction among the receipt of cash and the right to receive it, and the payment of cash and legal obligation to pay it. In fact business operations, the obligation to pay and the actual movement of cash might not coincide.
The accrual concept needs recognition of revenue and expenses on a comparable basis that is revenue and expense are allocated to a particular accounting period on a consistent basis.
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Rating Symbol Capacity for Timely Repayment Rating Symbol Capacity for Timely Repay
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Blossom Lawn expects to have total sales next year totaling $15,000,000 and the firm pays taxes at 35% and will owe $300,000 in interest expenses.
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