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Maturity Matching

Do you think that the accounting method that an entity uses affects its maturity matching? For example, most corporations operate under a full accrual system where revenues are recognized when they are earned and expenses are recognized when they are incurred. Most small businesses operate on a cash basis -- revenue is recognized when it is received and expenses are recognized when they are paid (like a checkbook). Most government operates on modified accrual -- cash basis from January 1 through December 30, revert to full accrual on December 31, and right back to cash basis. Do you think an entity's accounting basis correlate to their maturity matching?

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Maturity Matching

Do you think that the accounting method that an entity uses affects its maturity matching? For example, most corporations operate under a full accrual system where revenues are recognized when they are earned and expenses are recognized when they are incurred. Most small businesses operate on a cash basis -- revenue is recognized when it is received and expenses are recognized when they are paid (like a checkbook). Most government operates on modified accrual -- cash basis from January 1 through December 30, revert to full accrual on December 31, and right back to cash basis. Do you think an entity's accounting basis correlate to their maturity matching?

Maturity matching refers to the harmonization of a firm's cash inflows with cash outflows through the process of matching the maturity of income generating ...

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