One major difference between deferral and accrual adjustments is: Answer
| accrual adjustments affect income statement accounts and deferral adjustments affect balance sheet accounts. | ||
| deferral adjustments increase net income and accrual adjustments decrease net income. | ||
| deferral adjustments are made under the cash basis of accounting and accrual adjustments are made under the accrual basis of accounting. | ||
| accounts affected by an accrual adjustment always go in the same direction (i.e., both accounts are increased or both accounts are decreased) and accounts affected by a deferral adjustment always go in opposite directions. |