One major difference between deferral and accrual adjustments is that:
A. deferral adjustments increase net income, and accrual adjustments decrease net income.
B. 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 (one account is increased and one account is decreased).
C. accrual adjustments affect income statement accounts, and deferral adjustments affect balance sheet accounts.
D. deferral adjustments are made under the cash basis of accounting, and accrual adjustments are made under the accrual basis of accounting.
Answer: B
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