One of your friends, who is also a classmate, came to you and asked the following:
“I’m confused about the terms deferral and accrual. For me, it is easiest to think about how the receipt of cash compares with the timing of revenue recognition. There are times when revenue recognition happens before the receipt of cash and others where that happens after. How do the deferral and accrual terms link to these before and after scenarios?”

Required
Prepare your response.