Question

1. Which type of adjustment occurs when cash is either collected or paid, but the related income or expense is not reportable in the current period?

a. deferral

b. accrual

c. estimate

d. cull

2. Salaries owed but not yet paid is an example of which of the following?

a. accrued expense

b. accrued revenue

c. deferred expense (prepaid expense)

d. deferred revenue (unearned revenue)

3. Which of the following breaks down company financial information into specific time spans, and can cover a month, quarter, half-year, or full year?

a. accounting period

b. yearly period

c. monthly period

d. fiscal period

Answer 1

Answers :

1. Option A (Deferral)

The deferral adjustment occurs when the amount received or paid but the income or expenses is not reportable in the current period. Because they are not related to the current year but received now then we should deferr the income or expense to the future years.Therefore Option A deferral is the correct answer.

2. Option A (Accrued Expense)

An accrued expense is an which is time to payment but not yet paid. Therefore salaries owed but not yet paid is also a accrued expense. Therefore Option A is the correct answer.

3. Option A (Accounting Period)

Accounting period is the one which breaks down the financial information into specific time spans and can cover a month, quarter, half year or a full year. Therefore Option A is the correct answer.

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