Which One of the Following Is Not a Proper Method

question 78

Multiple Choice

Which one of the following is not a proper method of recognizing assets as expenses in a particular accounting period?

• A)Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays.
• B)Prepaid insurance is assigned to expense as the insurance expires.
• C)A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used.
• D)Merchandise inventory is assigned to cost of goods sold in the period the goods are sold.

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Definitions:

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes associated with maintaining the business.

Bill

A statement of money owed for goods sold or services provided, presented to a purchaser by a vendor.

Red Bell Peppers

A cultivar of the species Capsicum annuum, noted for its sweet taste and vibrant red color, commonly used in cooking and salads.

Imported

Goods or services brought into one country from another, subject to trade regulations and possibly tariffs.