Explained accrual in month close and year end close

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Accruals in month and year end close are adjustments made to recognize revenues and expenses that have been incurred but not yet recorded.

Accruals are necessary to ensure financial statements reflect the true financial position of a company.
In month close, accruals are made to match revenues and expenses to the period in which they were incurred.
For example, if a company receives a utility bill in December but the service was provided in November, an accrual would be made to recognize the expense in November.
In year end close, accruals are crucial to accurately report annual financial performance.
Accruals help prevent misrepresentation of financial results by recognizing revenues and expenses in the correct period.

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