Question: Which answer best describes accruals and deferrals?

1. Accruals are past cash receipts and payments, while deferrals are expected future cash receipts and payments.
2. Both accruals and deferrals are both expected future cash receipts and payments.
3. Accruals are expected future cash receipts and payments, while deferrals are past cash receipts and payments.
4. Both accruals and deferrals are not expected past cash receipts and payments.

Answer: The correct answer of the above question is Option C:Accruals are expected future cash receipts and payments, while deferrals are past cash receipts and payments.