Incurring an Expense in the Current Accounting Period, Which Will

question 95

Multiple Choice

Incurring an expense in the current accounting period, which will be paid in the following accounting period, will require:

• A)a debit to an expense and a credit to a liability.
• B)a debit to a liability and a credit to an expense.
• C)a debit to an expense and a credit to cash.
• D)a debit to an expense and a credit to capital.

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Definitions:

Investment

Items acquired with the hope that they will produce earnings or increase in value over time.

Annual Return

The percentage change in an investment's value over a one-year period, including dividends, interest, and capital gains.

Education Fund

A savings or investment account set aside for educational expenses, often with tax advantages, to support an individual's future education costs.

Total Value

The combined market value or monetary worth of all assets, goods, services, or obligations.