One Type of Deferral Adjustment Reduces the Balance in A(n)________

question 172

Multiple Choice

One type of deferral adjustment reduces the balance in a(n) ________ account on the balance sheet and transfers that reduction into a(n) ________ account on the income statement.

• A)asset;expense
• B)asset;revenue
• C)liability;expense
• D)liability;asset

---

Definitions:

Startup Capital

Initial funding used to start a business, covering costs such as product development, market research, and operational expenses until the business becomes self-sustaining.

Small Business Success

The achievement of desired visions and planned goals, leading to a sustainable competitive advantage for a small business, often measured by financial performance, market share, or innovation.

Creative Destruction

An economic theory that suggests the dismantling of long-standing practices in order to make way for innovation and new systems that enhance economic vitality.

Joseph Schumpeter

An economist and political scientist who proposed the theory of creative destruction in economics.