The Term Deferral Refers to an Event Where The

question 106

Multiple Choice

The term deferral refers to an event where the:

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

---

Definitions:

Company

A legal entity formed by individuals, stockholders, or shareholders, with the purpose of operating for profit.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund day-to-day operations.

Company

An organized entity formed for the purpose of conducting business, wherein it can earn revenues, incur expenses, and operate with the aim of profit.

Inventory Turnover

A metric indicating the frequency at which a company's stock is sold and replenished within a specific timeframe.