A Deferral Refers to an Event

question 74

Multiple Choice

A deferral refers to an event:

• A) where the recognition of an expense or revenue is recorded before the cash is paid or received
• B) where the liability for an expense is recorded after the expense is actually incurred
• C) where the recognition of an expense or revenue is recorded after the cash is paid or received
• D) where the liability for an expense is recorded before the expense is actually incurred

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Definitions:

Income Statement

The income statement is a financial report that shows a company's revenues, expenses, and net income over a specific period, illustrating its profitability.

Non-Operating Activities

Activities and financial events that fall outside the core operations of a business, such as investment income or losses, and gains or losses from the sale of assets.

Income from Operations

Revenue generated from a company's core business operations, excluding deductions of expenses and taxes.

Net Income

The sum a company retains as earnings after all taxes and expenses have been deducted from its income.