Which of the Following Is an Application of Accrual Accounting

question 25

Multiple Choice

Which of the following is an application of accrual accounting?

• A) Depreciating a building as quickly as allowed by income tax regulations
• B) Recording utilities expense in the accounting period when the bill is paid
• C) Expensing a machine in its entirety when purchased
• D) Recording revenue at the time services are rendered

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Definitions:

Yield

It refers to the earnings generated and realized on an investment over a particular period, expressed as a percentage.

Duration

A measure of the average life of a bond, defined as the weighted average of the times until each payment is made, with weights proportional to the present value of the payment.

Bond

A fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.

Zero-Coupon Bond

A bond paying no coupons that sells at a discount and provides only payment of face value at maturity.