Please choose the correct ending to complete the given sentence: Finance and Business: [header] How to account for deferred revenue [title] Familiarize yourself with the accrual basis of accounting. [step] Deferred revenue is an aspect of what is called the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded on the income statement when they are earned rather than received.

Ending1: Stockholders are usually established on the transaction's terms or agreed upon at some point in accounting. [substeps] The accrual basis of accounting is represented by a red dotted link on the ledger sheet. Ending2: Accrual revenues reflect the amount of annual earnings the company produces each year. The accrual basis plans to work with the amounts factored into your business' total revenue. Ending3: This contrasts with the cash basis of accounting wherein the opposite is true. [title] Understand why you need to defer revenue. Ending4: [substeps] The accrual basis generally only reflects revenue earned on a particular company. Borrowing from other customers, checking the accrual basis, or taking payment from equity in a company is one of the most typical sources of deferred revenue.

Answer format: ending1/ending2/ending3/ending4