To keep matters as simple as possible and to focus on the interrelationships among financial statements, this chapter considered only cash events. Obviously, many real-world events do not involve an immediate exchange of cash. For example, customers use telephone service throughout the month without paying for it until the next month. Such phone usage represents an expense in one month with a cash exchange in the following month. Events such as this are called accruals. Understanding the effects that accrual events have on the financial statements is included in Chapter 2.