SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996.

TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______________ TO _______________.

Commission file number: 0-24484

AccuStaff Incorporated
(Exact name of registrant as specified in its charter)

Florida 59-3116655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

6440 Atlantic Boulevard, Jacksonville, Florida 32211
(Address of principal executive offices) (Zip Code)

(904) 725-5574
(Registrant's telephone number including area code)

N/A
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

November 7, 1996
Common Stock, $0.01 par value: 66,085,488
(No. of Shares)

ACCUSTAFF INCORPORATED AND SUBSIDIARIES

INDEX

PAGE
----

PART I Financial Information

ITEM 1 Financial Statements

Consolidated Balance Sheets as of September 30, 1996 and
December 31, 1995............................................... 2

Consolidated Statements of Income for the Three and Nine Months
Ended September 30, 1996 and October 1, 1995.................... 3

Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 1996 and October 1, 1995.......................... 4

Notes to Consolidated Financial Statements...................... 5-7

ITEM 2 Management's Discussion and Analysis of Financial............... 8-13
Condition and Results of Operations

PART II Other Information

ITEM 4 Submission of Matters to a Vote of Security-Holders............. 14

ITEM 6 Exhibits and Reports on Form 8-K................................ 15

Signatures...................................................... 16

ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

ASSETS
------

SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------

Current assets:
Cash and cash equivalents.............. $130,389 $ 34,427
Accounts receivable, net............... 120,341 41,266
Prepaid expenses....................... 7,323 1,170
Deferred income taxes.................. 83 1,353
-------- --------
Total current assets.................. 258,136 78,216

Furniture, equipment, and leasehold 13,353 6,235
improvements, net......................
Goodwill, net........................... 233,658 65,489
Other assets............................ 13,727 931
-------- --------

Total assets.......................... $518,874 $150,871
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable, current portion......... $ 8,914 $ 10,512
Accounts payable and accrued expenses.. 13,830 4,140
Accrued payroll and related taxes...... 22,695 9,534
Accrued workers' compensation claims... 3,453 2,700
Convertible subordinated debentures.. 1,000 -
-------- --------

Total current liabilities............. 49,892 26,886

Convertible subordinated debentures..... - 2,300
Notes payable, long-term portion........ 11,199 4,510
Deferred income taxes, non-current 3,742 276
portion................................ -------- --------

Total liabilities.................. 64,833 33,972
-------- --------

Commitments
Stockholders Equity:
Preferred stock, $.01 par value; 10,000
shares authorized; no shares issued
and outstanding..................... - -
Common stock, $.01 par value; 150,000
shares authorized; 66,041 and
51,374 shares issued and outstanding
on September 30, 1996 and
December 31, 1995, respectively..... 660 514
Additional contributed capital........ 418,838 96,765
Retained earnings..................... 39,227 19,699
-------- --------
458,725 116,978

Less: Deferred stock compensation.. (4,684) (79)
-------- --------

Total stockholders' equity............ 454,041 116,899
-------- --------
Total liabilities and stockholders'
equity............................... $518,874 $150,871
======== ========

See Notes to Consolidated Financial Statements

ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)

THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ ------------------------------
SEPT. 30, 1996 OCT. 1, 1995 SEPT. 30, 1996 OCT. 1, 1995
--------------- ------------- --------------- -------------

Revenue................................. $218,810 $84,096 $553,271 $221,616
Cost of revenue......................... 169,876 67,530 434,397 181,293
-------- ------- -------- --------
Gross profit...................... 48,934 16,566 118,874 40,323
-------- ------- -------- --------

Operating expenses:
General and administrative........ 27,829 10,533 71,347 26,575
Depreciation and amortization..... 3,096 655 7,274 1,390
-------- ------- -------- --------
Total operating expenses...... 30,925 11,188 78,621 27,965
-------- ------- -------- --------
Income from operations............ 18,009 5,378 40,253 12,358
-------- ------- -------- --------

Other income (expense):
Interest income................... 1,364 67 2,782 364
Interest expense.................. (369) (224) (2,280) (405)
Acquisition expense............... - - (2,800) -
-------- ------- -------- --------
Total other income (expense).. 995 (157) (2,298) (41)
-------- ------- -------- --------
Income before provision for income taxes 19,004 5,221 37,955 12,317
-------- ------- -------- --------
Provision for income taxes.............. 7,410 1,509 16,152 3,331
-------- ------- -------- --------
Net income........................ $ 11,594 $ 3,712 $ 21,803 $ 8,986
======== ======= ======== ========

Pro forma data:
Income before provision
for income taxes.............. 19,004 5,221 37,955 12,317
Provision for income taxes,
pro forma..................... 7,410 2,021 15,589 4,764
-------- ------- -------- --------
Pro forma net income.............. $ 11,594 $ 3,200 $ 22,366 $ 7,553
======== ======= ======== ========

Pro forma earnings per share............ $0.17 $0.08 $0.35 $0.19
======== ======= ======== ========

Weighted average number of common
shares and common share equivalents
outstanding............................ 69,514 39,577 64,864 39,267
======== ======= ======== ========

See Notes to Consolidated Financial Statements

ACCUSTAFF INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

NINE MONTHS ENDED
-----------------------------
SEPT. 30, 1996 OCT.1, 1995
--------------- ------------

Cash flows provided by (used in)
operating activities:
Net income............................. 21,803 8,986
--------- --------
Adjustments to reconcile net income
to net cash provided by
(used in) operating activities:
Depreciation and amortization.... 7,274 1,390
Provision for doubtful accounts 777 356
Deferred income taxes............ 4,705 (728)
Compensation for stock options
granted......................... 283 72
Changes in certain assets and
liabilities:
Accounts receivable............ (40,153) (8,733)
Prepaid expenses............... 2,759 (68)
Other assets................... (1,601) (415)
Accounts payable and accrued
expenses...................... 11 2,065
Accrued payroll and related
taxes......................... 8,900 5,011
Accrued workers'
compensation claims........... 753 1,213
--------- --------
Net cash provided by
operating activities....... 5,511 9,149
========= ========
Cash flows provided by (used in)
investing activities:
Purchases of investments............... (10,438) (2,028)
Sales and maturities of investments.... - 8,842
Purchase of furniture, equipment and
leasehold improvements................ (6,380) (2,016)
Purchase of businesses, including
additional earn-outs on
acquisitions net of cash
acquired.............................. (169,559) (25,588)
--------- --------
Net cash used in
investing activities....... (186,377) (20,790)
========= ========
Cash flows provided by (used in)
financing activities:
Proceeds from issuance of common
stock................................. 304,704 -
Proceeds from stock options exercised.. 2,828 388
Proceeds from issuance of
convertible subordinated debentures... - 2,000
Borrowings on notes payable............ 96,822 11,717

Repayments on notes payable............ (125,605) (2,515)
Distributions to former shareholders
of acquired S-corporations............ (1,921) (1,075)
--------- --------
Net cash provided by
financing activities....... 276,828 10,515
--------- --------

Net increase (decrease) in cash and 95,962 (1,126)
cash equivalents......................... --------- --------

Cash and cash equivalents, beginning of 34,427 9,438
period................................... --------- --------

Cash and cash equivalents, end of period.. $ 130,389 $ 8,312
========= ========

See Notes to Consolidated Financial Statements

ACCUSTAFF INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION.

The accompanying consolidated financial statements are unaudited and have
been prepared by the Company in accordance with the rules and regulations
of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures usually found in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. The financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Company's Form 10-K, as filed with the Securities and
Exchange Commission on March 27, 1996.

The accompanying consolidated financial statements reflect all adjustments
(including normal recurring adjustments) which, in the opinion of
management, are necessary to present fairly the financial position and
results of operations for the interim periods presented. The results of
operations for an interim period are not necessarily indicative of the
results of operations for a full fiscal year.

All share and per share data have been restated to reflect the Company's
stock splits in the form of a 100% stock dividend and a 200% stock dividend
which were effective November 27, 1995 and March 27, 1996, respectively.
In addition, the Company completed the acquisitions of The McKinley Group,
Inc. and an affiliated company ("McKinley") on June 19, 1996 and PTA
International ("Perma Temps") on January 2, 1996, each of which was
accounted for as a pooling of interests. Both McKinley and Perma Temps
were treated as S-corporations for federal income tax purposes prior to
their acquisition and accordingly were not subject to income tax at the
corporate level. Therefore, all prior period financial statements
presented have been restated as if the acquisitions had taken place at the
beginning of such periods and each was treated as a C-corporation for
federal income tax purposes.

2. AGREEMENT AND PLAN OF MERGER.

On August 26, 1996, the Company entered into an Agreement and Plan of
Merger (the "Agreement") with Sunrise Merger Corporation, a wholly owned
subsidiary of the Company and Career Horizons, Inc. ("Career") pursuant to
which the Company will acquire Career through the merger of Career and
Sunrise Merger Corporation. The companies have received notice from the
Federal Trade Commission of early termination of the waiting period under
the Hart-Scott-Rodino Act. The Joint Proxy Statement/Prospectus relating
to the Agreement was declared effective by the Securities and Exchange
Commission on October 7, 1996, and proxy materials were mailed to
shareholders of both companies on October 8, 1996, in advance of the
companies' special meetings of stockholders which will each be held on
November 14, 1996. The transaction is currently expected to close the same
day.

The unaudited pro forma condensed combined balance sheet and statement of
operations as of and for the nine months ended September 30, 1996, appear
below.

The unaudited pro forma condensed combined statements of operations for the
nine months ended September 30, 1996 give effect to (i) the acquisition of
Career applying the pooling of interests method of accounting and (ii) all
other acquisitions completed by AccuStaff and Career between January 1,
1996, and September 16, 1996, as if each had been completed on January 1,
1996. The unaudited pro forma condensed balance sheet as of September 20,
1996, presents the combined financial position of AccuStaff and Career as
if the Merger were consummated as of September 30, 1996. The unaudited pro
forma condensed balance sheet reflects (i) the Merger with Career applying
the pooling of interests method of accounting, (ii) certain adjustments
that are directly attributable to the Merger, including estimated non-
recurring acquisition costs of $15.0 million and estimated non-recurring
restructuring costs of $10.0 million,and (iii) all other acquisitions
completed by AccuStaff and Career through September 16, 1996. In accordance
with Securities and Exchange Commission Rules, the estimated non-recurring
acquisition costs of $15.0 million and estimated non-recurring corporate
restructuring costs related to the Merger of $10.0 million have not been
included in the pro forma condensed statement of operations included
herein.

PRO FORMA CONSOLIDATED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(Unaudited)
(In thousands)

ASSETS ACCUSTAFF CAREER ADJUSTMENTS PRO FORMA
------ ------------- ------------- ----------- ---------

Current assets:
Cash and cash equivalents.......................... $130,389 $ 29,964 $ - $160,353
Accounts receivable, net........................... 120,341 109,412 - 229,753
Due from associated offices, net................... - 36,592 - 36,592
Prepaid expenses................................... 7,323 4,213 - 11,536
Other receivables, net............................. - 2,687 - 2,687
Deferred income taxes.............................. 83 4,539 - 4,622
-------- -------- -------- --------
Total current assets............................ 258,136 187,407 - 445,543

Furniture, equipment and leasehold
improvements, net................................... 13,353 9,685 23,038
Goodwill, net........................................ 233,658 166,500 - 400,158
Deferred income taxes................................ - 1,460 (1,460)(c) -
Other assets......................................... 13,727 3,582 - 17,309
-------- -------- -------- --------
Total assets.................................... $518,874 $368,634 $ (1,460) $886,048
======== ======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable, current portion..................... $ 8,914 $ 3,714 $ - $ 12,628
Accounts payable and accrued expenses.............. 17,283 35,079 25,000 (a) 77,362
Accrued payroll and related taxes.................. 22,695 44,519 - 67,214
Convertible subordinated debentures................ 1,000 - - 1,000
-------- -------- -------- --------
Total current liabilities....................... 49,892 83,312 25,000 158,204

7% Convertible senior notes.......................... - 86,250 - 86,250
Notes payable, long term portion..................... 11,199 2,000 13,199
Deferred income taxes................................ 3,742 - (1,460)(c) 2,282
Other................................................ - 27 - 27
-------- -------- -------- --------
Total liabilities............................... 64,833 171,589 23,540 259,962
-------- -------- -------- --------

Commitments

Stockholders' equity:
Preferred stock, $.01 par value; 10,000 shares
authorized, no shares issued and outstanding..... - - -
Common stock, $.01 par value; 150,000 shares
authorized; 93,076 shares
issued and outstanding on September 30, 1996..... 660 177 93 (b) 930
Additional contributed capital..................... 418,838 169,824 (148)(b) 588,514
Retained earnings.................................. 39,227 27,099 (25,000)(a) 41,326
-------- -------- -------- --------
458,725 197,100 (25,055) 630,770
Less: Deferred stock compensation............... (4,684) - - (4,684)
Treasury stock............................ - (55) 55 (b) -

Total stockholders' equity...................... 454,041 197,045 (25,000) 626,086
-------- -------- -------- --------
Total liabilities and stockholders' equity...... $518,874 $368,634 $ (1,460) $886,048
======== ======== ======== ========

PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
for the nine months ended September 30, 1996
(Unaudited)
(In thousands)

Historical
--------------------------------------------------------------------
AccuStaff Career Pro Forma Pro Forma
AccuStaff Acquisitions Career Acquisitions Adjustments Combined
-----------------------------------------------------------------------------------

Revenue $553,271 $85,430 $444,342 $84,414 - $1,167,457
Cost of revenue 434,397 63,589 337,796 62,698 - 898,480
-------- ------- ------- ------ ------- ----------
Gross profit 118,874 21,841 106,546 21,716 - 268,977
-------- ------- ------- ------ ------- ----------
Operating expenses:
General and administrative 71,347 21,330 78,319 17,741 (11,079)(d) 177,658
Depreciation and amortization 7,274 175 4,808 472 2,943 (e) 15,672
-------- ------- ------- ------ ------- ----------
Total operating expenses 78,621 21,505 83,127 18,213 (8,136) 193,330
-------- ------- ------- ------ ------- ----------
Income from operations 40,253 336 23,419 3,503 8,136 75,647
-------- ------- ------- ------ ------- ----------
Other Income (expense)
Other - 71 - - - 71
Interest income 2,782 65 - - - 2,847
Interest expense (2,280) (331) (2,656) (425) (3,310)(f) (9,002)
Acquisition expense (2,800) - - - - (2,800)
-------- ------- ------- ------ ------- ----------
Total other income (expense) (2,298) (195) (2,656) (425) (3,310) (8,884)
-------- ------- ------- ------ ------- ----------
Income before provision for income taxes 37,955 141 20,763 3,078 4,826 66,763
Provision for income taxes(h) 15,589 56 7,993 1,185 1,930 (g) 26,753
-------- ------- ------- ------ ------- ----------
Net income $ 22,366 $ 85 $ 12,770 $ 1,893 $ 2,896 $ 40,010
======== ======= ======== ======= ======= ==========
Earnings per share of common and common
stock equivalents $ .035 $ 0.40
======== ==========
Weighted average number of shares outstanding 64,864 99,519
======== ==========

Pro Forma Adjustments
---------------------

(a) This adjustment reflects the accrual of non-recurring acquisition and
corporate restructuring costs related to the Merger and the related
reduction of retained earnings.

(b) This adjustment reflects the reclassification of stockholders' equity
required under the pooling of interests method of accounting.

(d) This adjustment primarily reflects the contractual reduction in officer
compensation relating to the AccuStaff and Career Acquisitions as the
result of negotiated employment agreements, which provides for
substantially the same management duties or responsibilities, offset by
increases in officers incentive compensation per employment agreements
of AccuStaff Incorporated.

(e) This adjustment reflects the increase in amortization expense related to
the goodwill recorded under the purchase method of accounting for the
AccuStaff and Career Acquisitions for the nine months ended September
30, 1996.

(f) This adjustment reflects the increase in interest expense for cash
required to be borrowed at an interest rate of 6.5% and for the
additional bank debt and notes payable at interest rates ranging from
6.5% to 8% related to the purchase of the AccuStaff Acquisitions.

(g) This adjustment reflects the increase to income tax expense based on the
pro forma adjustments to income before provision for income taxes based
on the Company's effective tax rate of approximately 40%.

(h) The provision for income taxes includes the provision which was recorded
on a pro forma basis for all companies acquired at the Company's
effective tax rate of 40%.

Calculation of Earnings Per Share
---------------------------------

Historical earnings per share of AccuStaff is presented after giving effect
to AccuStaff's November 1995 2-for-1 stock split and February 1996 3-for-1
stock split. The pro forma earnings per share is calculated on the basis of
the weighted average number of shares and common share equivalents of
AccuStaff, after giving effect to the splits, and the issuance of shares to
consummate the Merger, calculated by multiplying the weighted average
shares outstanding for Career by an assumed 1.53 conversion ratio.

3. INVESTMENTS.

Investment in Payroll Transfers, Inc. On August 8, 1996, the Company
established a strategic operating relationship with Payroll Transfers,
Inc., ("PTI") a Tampa, Florida based professional employer organization.
As part of this strategic relationship, the Company has agreed for a period
of eight years not to enter into any contract or understanding involving
the use of leased employees without first offering such business
opportunity to PTI. Likewise, PTI has agreed for a period of eight years
not to enter into any contract or understanding involving the use of
services of temporary employees without first offering such business
opportunity to the Company. In connection with entering into the
relationship, the Company invested in PTI in the form of an 8% Convertible
Subordinated Note (the "Note") from PTI which is convertible into PTI
common stock representing approximately 9.9% of PTI's outstanding common
stock. The Company also acquired an Option (the "Option") to purchase an
additional amount of PTI common stock equal to approximately 10% of the
outstanding shares of PTI after conversion of the Note and issuance of
the stock under the Option.

4. ACQUISITIONS.

The Company completed seven acquisitions in the three months ended
September 30, 1996. In July 1996, the Company acquired the operating
assets and business operations of Alta Technical Services, Inc., In-House
Counsel, Inc. and TRAK Services, Inc. and affiliated companies. In August
1996, the Company acquired the stock of Perspective Technology Corporation,
Datacorp Business Systems, Inc. and Staffware, Inc. In addition, in
September 1996, the Company acquired the operating assets and business
operations of North American Consulting Services, Inc.

The acquisition of Staffware has been accounted for under the pooling of
interests method of accounting while the other acquisitions completed
during the three months ended September 30, 1996 have been accounted for
under the purchase method of accounting. The aggregate purchase price of
the acquisitions accounted for under the purchase method of accounting was
$41.1 million, which was comprised of $34.0 million in cash, aggregate
notes payable to certain former shareholders acquired companies f $5.1
million, and common stock with a fair market value of $2.0 million. In
addition, certain former shareholders of the acquired companies are
eligible to receive contingent consideration upon attainment of certain
earnings targets. For acquisitions accounted for under the purchase method
of accounting, the excess of the purchase price (including any contingent
consideration paid) over the fair value of the tangible assets (goodwill)
is being amortized on a straight line basis over periods ranging from 15 to
30 years.

The pro forma results of operations for the nine months ended September 30,
1996 and October 1, 1995 listed below reflect purchase accounting
adjustments and pro forma adjustments, including reduction of officers'
compensation as the result of negotiated employment agreements and
calculation of a tax provision for subsidiaries which were formally treated
as S-corporations for federal income tax purposes, assuming the
acquisitions which occurred during the three months ended September 30,
1996 had occurred at the beginning of the nine month periods ended
September 30, 1996 and October 1, 1995. These pro forma amounts are not
necessarily indicative of what actually would have occurred if the
acquisitions had been in effect for the entire period presented. In
addition, they are not intended to be projections of future results and do
not reflect any synergies that might be achieved from combined operations.

NINE MONTHS ENDED
-------------------------------------
SEPT. 30, 1996 OCT. 1, 1995
-------------------------------------
(in thousands, except per share data)

Revenue................................. $638,700 $555,986
Gross profit............................ 140,714 115,534
Income from operations.................. 47,398 29,736
Income before provision for income taxes 41,594 16,581
Net income.............................. 24,543 10,088
Earnings per share...................... $ 0.38 $ 0.25

5. CHANGE IN FISCAL YEAR.

Commencing with the third quarter of 1996, the Company changed its fiscal
year from the period ending on the Sunday closest to December 31 of each
year to a calendar year.

6. SUBSEQUENT EVENTS.

Acquisitions Subsequent to September 30, 1996

In October 1996, the Company acquired the assets and business operations of
Contracted Services Group, Inc. d/b/a/ The Blackstone Group and the stock
of Scientific Staffing, Inc. and affiliated companies. The acquisitions
have been accounted for under the purchase method of accounting. The
aggregate purchase price of the acquisitions subsequent to September 30,
1996 was $36.4 million, which was comprised of cash in the amount of $32.4
million and notes payable to certain former shareholders aggregating $4.0
million. In addition, certain shareholders are eligible to receive
contingent consideration upon attainment of certain earnings targets. For
acquisitions accounted for under the purchase method of accounting, the
excess of the purchase price (including any contingent consideration paid)
over the fair value of the tangible assets (goodwill) is being amortized on
a straight line basis over 30 years.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
OCTOBER 1, 1995.

Revenues. Revenues increased $134.7 million, or 160.2%, to $218.8 million in
the three months ended September 30, 1996 from $84.1 million in the three months
ended October 1, 1995. The increase was attributable by division to:
Professional Services, $93.5 million, or an increase of 649.4%; Commercial,
$38.0 million, or an increase of 87.8%; and Telecommunications, $3.2 million, or
an increase of 12.0%. Of the increase in the Professional Services division,
$85.9 million was attributable to acquisitions in the information technology and
technical service lines while the remaining $7.6 million was attributable to
acquisitions in the legal and accounting service lines and internal growth. Of
the increase in the Commercial division, $29.3 million was attributable to three
significant acquisitions: Excel Temporary Services, Inc. ("Excel"), $11.4
million; HR Management Services, Inc. ("HR Management"), $5.8 million; and
TempsAmerica, $12.1 million. The remaining $8.7 million was attributable to
internal growth and less significant acquisitions. The increase in the
Telecommunications division was due to internal growth.

Gross Profit. Gross profit increased $32.3 million, or 195.4%, to $48.9 million
in the three months ended September 30, 1996 from $16.6 million in the three
months ended October 1, 1995. The overall gross profit as a percentage of sales
increased from 19.7% to 22.4%, due to the increase in the mix of revenue
contributed by the Professional Services division which produces a higher gross
profit. Gross profit as a percentage of sales remained constant in the
Commercial division at 21.7%, while decreasing by 480 basis points to 26.3% in
the Professional Services division, due primarily to the acquisition of certain
technical service companies which generate lower margins compared to the types
of services which were provided by the Company's Professional Services division
in the three months ended October 31, 1995. Gross profit as a percentage of
sales in the Telecommunications division decreased by 40 basis points to 9.8%.

Operating Expenses. Operating expenses increased $19.7 million, or 176.4%, to
$30.9 million in the three months ended September 30, 1996 from $11.2 million in
the three months ended October 1, 1995. Operating expenses as a percentage of
revenues increased to 14.1% in the three months ended September 30, 1996 from
13.3% in the three months ended October 1, 1995. The increase is attributable
to the increase in depreciation and amortization expense and an increase in the
mix of professional services being provided by the Company in comparison to
Commercial division and Telecommunications division services. Higher operating
expenses are required to operate the Professional Services division compared to
the Commercial and Telecommunications divisions

Income from Operations. Income from operations increased $12.6 million, or
234.9%, to $18.0 million in the three months ended September 30, 1996, from $5.4

million in the three months ended October 1, 1995. Income from operations as a
percentage of revenues increased to 8.2% in the three months ended September 30,
1996, from 6.4% in the three months ended October 1, 1995.

Interest Income. Interest income was $1.4 million for the three months ended
September 30, 1996 compared to $67,000 for the three months ended October 1,
1995, due to the interest income obtained from the proceeds of the Company's
public common stock offering in April 1996.

Interest Expense. Interest expense was $369,000 in the three months ended
September 30,1996 compared to $224,000 in the three months ended October 1,
1995.

Income Taxes. The Company's effective tax rate was 39.0% in the three months
ended September 30, 1996 compared to 38.7% in the three months ended October 1,
1995.

Pro Forma Net Income. As a result of the foregoing, pro forma net income
increased $8.4 million, or 262.3%, to $11.6 million in the three months ended
September 30, 1996, from $3.2 million in the three months ended October 1, 1995.
Pro forma net income as a percentage of revenues, increased to 5.3% in the three
months ended September 30, 1996, from 3.8% in the three months ended October 1,
1995.

NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED OCTOBER 1,
1995.

Revenues. Revenues increased $331.7 million, or 149.7%, to $553.3 million in
the nine months ended September 30, 1996 from $221.6 million in the nine months
ended October 1, 1995. The increase was attributable by division to:
Professional Services, $229.8 million, or an increase of 664.2%; Commercial,
$93.4 million, or an increase of 82.8%; and Telecommunications, $8.5 million, or
an increase of 11.4%. Of the increase in the Professional Services division,
$205.7 million was attributable to acquisitions in the information technology
and technical service lines, while the remaining $24.1 million was attributable
to acquisitions in the legal and accounting service lines and internal growth.
Of the increase in the Commercial division, $71.2 million was from four
significant acquisitions, Excel, $28.1 million; Matthews Professional Employment
Specialists, Inc., $9.9 million; HR Management, $15.5 million; and TempsAmerica,
$17.7 million. The remaining $22.2 million was attributable to internal growth
and less significant acquisitions. The increase in the Telecommunications
division was due to internal growth.

Gross Profit. Gross profit increased $78.6 million, or 194.8%, to $118.9
million in the nine months ended September 30, 1996 from $40.3 million in the
nine months ended October 1, 1995. The overall gross profit as a percentage of
sales increased from 18.2% to 21.5%, due to the increase in the revenue from
the Professional Services division which produces a higher gross profit. Gross
profit as a percentage of sales increased by 140 basis points to 21.4% in the
Commercial division, due to an overall increase in the division's gross profit
including existing and acquired companies, while decreasing by 510 basis points
to 25.2% in the Professional Services division, due primarily to the
acquisitions of certain technical service companies which generate lower margins

compared to the types of services which were provided by the Company's
Professional Services division in the nine months ended October 31, 1995. Gross
profit as a percentage of sales in the Telecommunications division decreased by
10 basis points to 9.8%.

Operating Expenses. Operating expenses increased $50.6 million, or 181.1%, to
$78.6 million in the nine months ended September 30, 1996 from $28.0 million in
the nine months ended October 1, 1995. Operating expenses as a percentage of
revenues increased to 14.7% in the nine months ended September 30, 1996 from
12.6% in the nine months ended October 1, 1995. The increase is attributable to
the increase in depreciation and amortization expense and an increase in the mix
of professional services being provided by the Company in comparison to
Commercial division and Telecommunication division services. Higher operating
expenses are required to operate the Professional Services division compared to
the Commercial and Telecommunications divisions

Income from Operations. Income from operations increased $27.9 million, or
225.7%, to $40.3 million in the nine months ended September 30, 1996, from $12.4
million in the nine months ended October 1, 1995. Income from operations as a
percentage of revenues increased to 6.8% in the nine months ended September 30,
1996, from 5.6% in the nine months ended October 1, 1995.

Interest Income. Interest income was $2.8 million for the nine months ended
September 30, 1996 compared to $364,000 for the nine months ended October 1,
1995, due to the interest income obtained from the proceeds of the Company's
April 1996 public offering of common stock.

Interest Expense. Interest expense was $2.3 million for the nine months ended
September 30, 1996 compared to $405,000 for the nine months ended October 1,
1995. The increase is attributable to the utilization of the Company's credit
facility to fund acquisitions completed in 1996 prior to the Company's April
1996 public common stock offering of 1996.

Income Taxes. The Company's effective tax rate was 41.1% in the nine months
ended September 30, 1996 compared to 38.7% in the nine months ended October 1,
1995. The increase was due primarily to non-tax deductible acquisition expenses
of $2.8 million related to the McKinley acquisition, which were recognized in
the second quarter of 1996.

Pro Forma Net Income. As a result of the foregoing, pro forma net income
increased $14.8 million, or 196.1%, to $22.4 million in the nine months ended
September 30, 1996, from $7.6 million in the nine months ended October 1, 1995.
Pro forma net income as a percentage of revenues, increased to 4.0% in the nine
months ended September 30, 1996 from 3.4% in the nine months ended October 1,
1995.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds are from operations, proceeds of Common
Stock offerings and borrowings under its $150 million revolving credit facility.
The Company's principal uses of cash are to fund acquisitions, working capital
and capital expenditures. The Company generally pays its temporary employees
weekly for their services while receiving payments from customers 35 to 60 days
from the date of invoice. As new offices are established or acquired, or as
existing offices expand, there will be increasing requirements for cash
resources to fund current operations.

During the nine months ended September 30, 1996, the Company experienced a large
increase in accounts receivable which was the primary cause for the decrease in
the Company's net cash provided by operating activities. The increase in
accounts receivable was primarily due to several acquisitions in which the
Company purchased the business operations and certain assets of the acquired
companies, excluding accounts receivable. Therefore, the Company must finance
the acquired companies' initial accounts receivable balances causing a large
increase in accounts receivable. The Company may continue to experience these
temporary fluctuations if any similarly structured acquisitions are completed in
the future. The Company will use either its credit facility or other cash on
hand to fund these temporary operational cash flow needs.

During April 1996, the Company completed an offering of 11.79 million shares of
common stock from which the Company received net proceeds of approximately
$304.7 million. The net proceeds have been used, in part, to repay $92.8
million in outstanding indebtedness under the Company's revolving credit
facility, while an additional $81.5 was used to fund acquisitions and for other
general corporate purposes through September 30, 1996. As of September 30,
1996, the Company had $130.4 million in cash and cash equivalents which are
available for other general corporate purposes, including possible acquisitions.

The Company is obligated under various acquisition agreements to make earn-out
payments to former stockholders of acquired companies over the next five years.
The Company cannot currently estimate the total amount of these payments;
however, the Company anticipates that the cash generated by the operations of
the acquired companies will provide a substantial part of the capital required
to fund the earn-out payments.

The Company anticipates that improvements to its management information and
operating systems will require capital expenditures during the next twelve
months of approximately $3.4 million. The Company anticipates recurring capital
expenditures in future years to be approximately $1.5 million per year.

The Company believes that funds provided by operations, available borrowings
under the credit facility and current amounts of cash will be sufficient to meet

its presently anticipated needs for working capital expenditures and
acquisitions for at least the next 12 months.

INDEBTEDNESS OF THE COMPANY

On May 2, 1996, the Company's revolving credit facility was amended and
restated to increase the available line from $100 million to $150 million in
connection with the syndication of the facility. The facility was syndicated to
a group of 13 banks, with NationsBank, N.A. as agent. The facility has a term
of five years expiring February 1, 2001. Outstanding amounts under the facility
bear interest at floating rates. The facility contains certain affirmative and
negative covenants relating to the Company's operations, including a provision
requiring approval by the lenders holding not less than two-thirds of the credit
exposure under the facility for any business acquisitions if the cost of the
acquisition exceeds the lesser of $20 million or 10% of the Company's
consolidated stockholders' equity. As of September 30, 1996, the Company had no
outstanding borrowings under the facility.

The Company has certain notes payable to shareholders of acquired companies.
The notes payable bear interest at rates ranging from 5% to 8% and have
repayment terms from June 1996 to March 1999. As of September 30, 1996, the
Company owed approximately $19.5 million in such acquisition indebtedness.

The company has outstanding $1.0 million of 6% Convertible Subordinated
Debentures outstanding which are convertible into Common Stock at $1.38 per
share. The debentures mature in January 1997 and are not redeemable.

INFLATION

The effects of inflation on the Company's operations were not significant during
the periods presented in the financial statements. Generally, throughout the
periods discussed above, the increases in revenue have resulted primarily from
higher volumes, rather than price increases.

OTHER MATTERS

In 1996, the Company will adopt SFAS No. 123, "Accounting for Stock-Based
Compensation." This standard establishes a fair value method of accounting for
stock-based compensation plans, either through recognition or disclosure. The
Company intends to adopt this standard by disclosing the pro forma net income
and earnings per share amounts assuming the fair value method was adopted on
January 1, 1995. The adoption of this standard will not impact results of
operations, financial positions or cash flow.

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Form 10-Q contains certain forward-looking statements which involve
risks and uncertainties. The Company's actual results could differ materially

from the results anticipated in these forward-looking statements as a result of
certain of the factors set forth under "Risk Factors" and elsewhere in the
Company's Prospectus dated April 18, 1996.

PART II OTHER INFORMATION

ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS.

2.1 Agreement and Plan of Merger by and among AccuStaff Incorporated,
Sunrise Merger Corporation and Career Horizons, Inc. dated August
25, 1996, incorporated by reference to the Company's Form 8-K
dated August 25, 1996.

10.1 Purchase Agreement between Payroll Transfers, Inc. and AccuStaff
Incorporated dated August 8, 1996.

10.2 Option Agreement between AccuStaff Incorporated and Payroll
Transfers, Inc. dated August 8, 1996.

10.3 8% Subordinated Convertible Note due August 8, 1996, made by
Payroll Transfers, Inc. in favor of AccuStaff Incorporated.

10.4 Strategic Relationship Agreement between AccuStaff Incorporated
and Payroll Transfers, Inc. dated August 8, 1996.

10.5 Registration Rights Agreement between AccuStaff Incorporated and
Payroll Transfers, Inc. dated August 8, 1996.

11 Calculation of Per Share Earnings.

27 Financial Data Schedule.

(b) Reports on Form 8-K. The Company filed the following reports on Form
8-K with the Securities and Exchange Commission during the quarter ended
September 30, 1996:

Form 8-K dated June 19, 1996 relating to the acquisition of The
McKinley Group, Inc. and MGI Services, Inc.

Form 8-K/A dated June 19, 1996 relating to the acquisition of The
McKinley Group, Inc. containing the following financial statements for
The McKinley Group, Inc.

Report of Independent Accountants
Combined Balance Sheet as of September 30, 1995 and 1994
Combined Statements of Operations for the Years Ended
September 30, 1995 and 1994
Combined Statement of Changes in Stockholders' Equity for the
Years Ended September 30, 1995 and 1994
Notes to Financial Statements

Combined Balance Sheet as of June 30, 1996 (unaudited)
Combined Statements of Operations for the Six Months Ended
June 30, 1995 and 1996 (unaudited)
Combined Statements of Cash Flows for the Six Months Ended
June30, 1995 and 1996 (unaudited)
Notes to Interim Financial Statements

Pro Forma Financial Information
Introduction to Pro Forma Unaudited Combined Financial
Information
Pro Forma Combined Statement of Operations for the Year Ended
December 31, 1995 (unaudited)
Pro Forma Combined Statement of Operations for the Six Months
Ended June 30, 1996 (unaudited)
Notes to Unaudited Pro Forma Combined Statement of Operations

Form 8-K dated August 26, 1996 relating to the Agreement and Plan of
Merger by and among AccuStaff Incorporated, Sunrise Merger Corporation
and Career Horizons, Inc.

Form 8-K dated September 16, 1996, relating to certain financial
statements of AccuStaff Incorporated as restated to give effect to the
acquisition of The McKinley Group, Inc. This current Report contained
the following AccuStaff Incorporated financial statements:

Consolidated Balance Sheets as of December 31, 1995 and
January 1, 1995
Consolidated Statements of Income for the Years Ended
December 31, 1995, January 1, 1995 and January 2, 1994
Consolidated Statements of Stockholders' Equity for the Years
Ended December 31, 1995, January 1, 1995 and January 2, 1994

Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, January 1, 1995 and January 2, 1994
Notes to Consolidated Financial Statements

Form 8-K dated September 16, 1996, relating to the financial statements
of certain companies previously acquired by AccuStaff. The financial
statements filed for each of the acquired companies are listed below:

HNS Software, Inc.
Report of Independent Accountants
Balance Sheet as of December 31, 1995
Statement of Income for the Year Ended December 31, 1995
Statement of Changes in Stockholders' Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31 ,1995
Notes to Financial Statements

Openware Technologies, Inc.
Report of Independent Accountants
Balance Sheet as of December 31, 1995
Statement of Operations for the Year Ended December 31, 1995
Statement of Changes in Stockholders' Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31, 1995
Notes to Financial Statements

Staffware, Inc.
Report of Independent Accountants
Balance Sheet as of December 31, 1995
Statement of Income for the Year Ended December 31, 1995
Statement of Changes in Stockholders' Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31 ,1995
Notes to Financial Statements

Datacorp Business Systems, Inc.
Report of Independent Accountants
Balance Sheet as of December 31, 1995
Statement of Income for the Year Ended December 31, 1995
Statement of Changes in Stockholders' Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31 ,1995
Notes to Financial Statements

Career Enhancement International, Inc.
Independent Auditor's Report

Balance Sheet as of December 31, 1995
Statement of Income for the Year Ended December 31, 1995
Statement of Changes in Stockholder's Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31 ,1995
Notes to Financial Statements

Perspective Technology Corporation
Independent Auditors' Report
Balance Sheet as of December 31, 1995
Statement of Income for the Year Ended December 31, 1995
Statement of Changes in Stockholders' Equity for the Year Ended
December 31, 1995
Statement of Cash Flows for the Year Ended December 31 ,1995
Notes to Financial Statements

Unaudited Interim Financial Information of Insignificant
Subsidiaries
Balance Sheet as of June 30, 1996 (Unaudited)
Statement of Income for the Six Months Ended June 30, 1996
(unaudited)
Statement of Cash Flows for the Six Months Ended June 30, 1996
(unaudited)

Unaudited Pro Forma Information
Introduction to Unaudited Pro Forma Financial Information
Pro Forma Combined Balance Sheets as of June 30, 1996
(unaudited)
Notes to Pro Forma Combined Balance Sheet (unaudited)
Pro Forma Combined Statement of Income for the Six Months Ended
June 30, 1996 (unaudited)
Pro Forma Combined Statement of Income for the Year Ended June
30, 1996 (unaudited)
Notes to Unaudited Pro Forma Combined Statements of Income
(unaudited)

ACCUSTAFF INCORPORATED AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

ACCUSTAFF INCORPORATED

November 12, 1996 /S/ Derek E. Dewan
---------------------------------------
DEREK E. DEWAN
Chairman, President and Chief Executive
Officer

November 12, 1996 /S/ Michael D. Abney
---------------------------------------
MICHAEL D. ABNEY
Senior Vice President and Chief
Financial Officer