In the Space Below,state Whether Each Situation Is a Deferral

question 245

Essay

In the space below,state whether each situation is a deferral or an accrual.
______
a.
Unrecorded interest on savings bonds is $765.
______
b.
Property taxes that have been incurred but that have not yet been paid or recorded amount to $1,034.
______
c.
Legal fees of $2,890 were collected in advance. By year end, 70 percent were still unearned.
______
d.
Prepaid Insurance had a $900 balance prior to adjustment. By year end, 25 percent was still unexpired.
______
e.
Salaries earned by employees by year end but not yet paid or recorded amounted to $1,655.
______
______ f. Services totaling $690 have been performed but not yet recorded or billed.

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Definitions:

Accounting Methods

The specific rules and procedures used by a business to prepare its financial statements, including how it recognizes revenue and expenses.

Revenue Recognition

Revenue recognition is an accounting principle that outlines the specific conditions under which revenue is recognized and dictates how to account for it.

Distributions

Payments made by a fund, trust, or company to its shareholders or partners, often from profits or interest earned.