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By not adhering to the consistency theory, a business could continually change concerning rules of its transactions and make its important source prolonged-term monetary benefits tough to acknowledge.
The accrual theory is the concept that accounting transactions must be recorded during the period through which they occur not simply just while in the period of time in which you will discover associated hard cash flows.
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Project accounting is often used by govt contractors, exactly where the ability to account for expenses by deal (and at times contract line merchandise, or CLIN) is often a prerequisite for interim payments.[five]
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