It may seem odd to recognize something in the financial statements in a period before or after the cash related to that transaction is paid or received. Why not just show expenses when you pay cash out and show revenue when you receive cash from customers? Wouldn't that be a lot less confusing? Give your thoughts on why it might be more accurate or desirable to use accruals (recognizing revenue or expense before cash is exchanged) and deferrals (recognizing revenue or expense in a period after cash is exchanged)