Which of the Following Accounts Would Be Used Under the Accrual

question 71

Multiple Choice

Which of the following accounts would be used under the accrual method of accounting, but NOT under the cash- basis method of accounting.

• A)Unearned revenue
• B)Salary expense
• C)Cash
• D)Equipment

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Definitions:

Derivative Securities

Financial instruments whose value is derived from the value of one or more underlying assets or benchmarks.

Contingent Claims

Financial derivatives that pay out based on the occurrence of specific events or conditions, such as options or certain types of insurance contracts.

Exercise

In financial terms, it refers to the act of invoking the right to buy or sell the underlying asset in a derivative contract.

Payoffs

The potential financial returns or losses from an investment, transaction, or strategy, often evaluated at the time of an investment's maturity or closure.