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

question 159

Essay

In the space below,state whether each situation is a deferral or an accrual.
______
a.
Depreciation on machinery is $7,200 for the accounting period.
______
b.
Interest that has been incurred on a loan but that has not yet been paid or recorded is $675.
______
c.
Office supplies of $965 were on hand at the beginning of the period. Purchases of office supplies during the period totaled $640. At the end of the period, $120 in office supplies remained.
______
d.
Commissions amounting to $975 were earned but not yet collected by year end.
______
e.
Prepaid Rent had a $2,500 balance prior to adjustment. By year end, 50 percent had expired.
______
______ f. Federal income taxes for the year were estimated to be $4,680.

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Definitions:

Profit-Maximizes

Strategies or actions by firms aimed at increasing their profits to the highest possible level.

Total Cost

The market value of the inputs a firm uses in production.

Marginal Cost

The supplementary cost that comes with the creation of one more unit of a product or service.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit, leading to price taking behavior.