BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Recognizing expenses incurred but not yet recorded
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Recording prepaid rent
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Recognizing revenues earned but not yet recorded
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Accruing year-end wages
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Detailed explanation-1: -So we can understand deferral by this example. At1 Jan company paid12 month prepaid rent amount12000, at end of jan1000 would be expense out in income statement while rest11000 would recognized as prepaid asset in balance sheet. so we can say this11000 is deferral.
Detailed explanation-2: -Here are some examples of deferrals: Insurance premiums. Subscription based services (newspapers, magazines, television programming, etc.) Prepaid rent.
Detailed explanation-3: -Which of the following is an example of a deferral (or prepaid) adjusting entry? Recording the usage of office supplies during the period.
Detailed explanation-4: -Deferral Example – Prepaid Expense An example of a deferral would be a company paying for rent in advance. In order to abide by the matching principle, a deferral must be made to adjust for the prepaid rent expense.
Detailed explanation-5: -The money which was paid or received but not reported in the income statement of the current year by the company is termed as the deferral.