Spotting assumptions, estimates, and biases - Deepstash

Spotting assumptions, estimates, and biases

Spotting assumptions, estimates, and biases

Accountants use accruals and allocations to attempt an accurate picture of the business for a month.

  • Accruals: An accrual is the part of a revenue or expense item that is recorded for a specific period, e.g., product development costs. The purpose is to match costs to revenues in a given timeframe.
  • Allocations: Theses are apportionments of costs to different departments or activities in a company.
  • Depreciation: Allocated cost of equipment and other assets to the total cost of product and services shown on the income statement.

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