Unit 2 • Lesson 20.8h
Accruals and Deferrals: Timing Is Everything
Students must understand why timing adjustments exist before they can automate them. This lesson isolates accruals and deferrals as the core month-end friction that Sarah faces every closing.
What You'll Learn
- ▶Identify when revenue or expense timing is wrong under cash vs. accrual accounting
- ▶Record adjusting entries for accrued revenues and accrued expenses
- ▶Record adjusting entries for deferred revenues and deferred expenses
- ▶Explain how adjustments change the income statement and balance sheet
Key Concepts
Accrual accounting records revenue when earned and expenses when incurred, not when cash moves
Accrued revenue: work done but not yet billed or paid
Accrued expense: cost incurred but not yet paid or billed
+3 more concepts
Lesson Phases
This lesson follows a structured 6-phase learning model designed for authentic project-based learning.
Hook
Reconnect to Lesson 01 and surface the timing problem that accruals solve
Introduction
Learn the four adjustment types with step-by-step worked examples
Guided Practice
Apply adjustments to messier scenarios with reduced scaffolding
Independent Practice
Algorithmic practice identifying and recording adjustments until mastery
Assessment
MCQ exit ticket on accruals and deferrals reasoning
Closing
Reflect on confidence, connect to business problem, preview closing entries
How You'll Learn
Direct instruction on accrual vs. cash timing
Worked examples with visible before/after statement changes
Algorithmic deliberate practice on identifying and recording adjustments