Which One of the Following Is an Example of an Accrued

question 209

Multiple Choice

Which one of the following is an example of an accrued liability?

• A)Rent that has been incurred, but have not been paid at the end of the period.
• B)Equipment that will benefit several periods has been purchased.
• C)An insurance policy that expires in a future period has been acquired.
• D)Supplies are purchased and used over several months.

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Definitions:

Bad Debt Expense Adjustment

An accounting entry to estimate and record the amount of accounts receivable that is not expected to be collected.

Accounts Receivables Turnover

A financial ratio that measures how often a company collects its average accounts receivable over a period.

Credit Sales

Sales transactions where payment is deferred, allowing customers to purchase goods or services on credit.

Receivables Turnover

A financial metric indicating how efficiently a company uses its assets by calculating the number of times average receivables are collected during a given period.