Which of the following is an example of a deferral (or prepaid) adjusting entry?Recording the usage of office supplies during the period.Recording salaries expense for employees not yet paid.Recording revenue that has been earned but not yet received.Recording interest expense incurred on notes payable not due until next year.

Question
Asked Dec 16, 2019
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Which of the following is an example of a deferral (or prepaid) adjusting entry?

  1. Recording the usage of office supplies during the period.
  2. Recording salaries expense for employees not yet paid.
  3. Recording revenue that has been earned but not yet received.
  4. Recording interest expense incurred on notes payable not due until next year.
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Expert Answer

Step 1

Deferrals: Deferrals are the revenues that are received but not earned, and expenses that are paid but not used.

Step 2
  • Recording the usage of office supplies cannot be recorded on a daily basis and requires the adjustment at year end hence it is an example of deferral adjustment entry. Thus it is the correct answer.
  • Recording of salaries not yet paid can be determined on a monthly basis hence no adjustment entry is required to record it. Thus it is not the correct answer.
  • Recording r...

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