A Journal Entry Contains a Debit to a Liability Account

question 127

Multiple Choice

A journal entry contains a debit to a liability account and a credit to a revenue account.This is an example of a(n) :

• A)accrued expense.
• B)deferred expense.
• C)unearned revenue.
• D)accrued revenue.

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Definitions:

Loss on Disposal

The financial loss incurred when an asset is sold for less than its carrying value on the books.

Other Revenue

Income generated from activities not related to a company’s primary operations.

Fixed Assets

Long-lasting physical resources used in the functioning of a business, not expected to be spent or transformed into cash over the course of one year.

Current Assets

Resources intended to be turned into cash, disposed of, or utilized within a period of one year or the duration of the company's usual operational cycle, depending on which of the two extends longer.