Question

Questions 4-1 Give two examples of explicit transactions. 4-2 Give two examples of implicit transactions. 4-3 Give two synonyms for unearned revenue. 4-4 Distinguish between the accrual of wages! and the payment of wages. 4-5 Give a synonym for income tax expense. 4-6 Explain why income tax expense is usu-

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY only the first four questions should be ansered. Kindly take note of it.

Part 4-1

As the term states, explicit transaction are based on the information that is specific, definite and involves actual amounts, not estimates. These transactions are fairly supported by the source documents. They are generally routine business transactions.

Examples:

- cash disbursement for the payment of 12 months' rent in advance.

- purchasing inventory on account.

Part 4-2

As the term states, implicit transactions involves no specific triggering event for recording of transaction. The change in values over the period of time are basic reason for recording of implicit transactions. These transactions are recorded as adjusting entries at the end of accounting period.

- expiration of prepaid rent.

- Depreication of assets

Part 4-3

Unearned revenue is revenue received in advance for the services and goods yet to be rendered.

Synonyms for unearned revenue are deferred revenue and prepaid revenue

Part 4-4

Wages accrue as hen the work is performed by the employee. The payment of wages is done periodically. Generally, Wages accrue before the payment of Wages.