However, only the obligations that come from the company’s operations and its dealings with vendors or suppliers become a part of its accounts payable balances.

Adjustment letters simply let taxpayers know they owe additional money or that there is a change in their refund amount, typically because of a miscalculation.

In accrual accounting, revenues are recognized when earned, not when received. This method ensures that financial statements reflect the real-time financial health of a property.