(Modify This Question for Your Jurisdiction

question 72

Multiple Choice

(Modify this question for your jurisdiction.) Bill,a college graduate,rented office space under a two-year lease.He needed the space because he contracted with the provincial government to create a program to integrate the various inventories of different government agencies.Bill hired Janet and Fred as full-time programmers for one year.He bought three desks for cash.He bought a $2000 laser printer,for which his dad signed as a guarantor.He bought another computer from a different seller under a conditional sales contract.Which of these contracts should be evidenced in writing to be enforceable?

• A) the contract with the government, because it will take more than a year to complete
• B) the employment contracts
• C) the contracts for the desks
• D) his dad's guarantee
• E) the lease

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Definitions:

Deferred Revenues

Income received by a company for goods or services not yet delivered or rendered, recorded as a liability on the balance sheet until earned.

Adjusting Entry

At the close of an accounting cycle, adjusting entries are recorded in the journal to apportion revenues and expenses to the time frame in which they were truly incurred.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded so far for an asset, reducing its book value on the balance sheet.