Which of the Following Is an Application of Accrual Accounting

question 113

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 covered by the monthly bill.
• C)Expensing a machine in its entirety when purchased.
• D)Recording revenue at the time payment is received.

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Definitions:

Jointly Controlled Operations

A collaboration where the entities involved do not create a separate entity but rather operate under a joint agreement, sharing control, and responsibilities.

Jointly Controlled Assets

Assets that are owned and controlled by two or more parties in a joint venture and are used to obtain benefits from engaging in an activity.

Unincorporated Contractual Association

A group of individuals engaged in a business enterprise without forming a legal corporation.

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not full control or majority ownership, typically involving the recognition of income proportional to its share of the investee's profits.