Which of the Following Transactions Will Not Result in the Recognition

question 152

Multiple Choice

Which of the following transactions will not result in the recognition of an expense?

• A) Interest accrued on a bank loan
• B) A cash withdrawal by the owner
• C) Use of machinery during the period
• D) Expiration of prepaid insurance

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Definitions:

Derivative Suit

A lawsuit brought by a corporation's shareholders on behalf of the corporation against parties allegedly causing harm to the corporation.

State Legislation

Laws and regulations enacted by the legislative bodies of individual states within a federal system, as opposed to federal legislation which is enacted by the national government.

Legal Violations

Acts or omissions that breach the law, subjecting the violator to legal sanctions, penalties, or legal proceedings.

Wrongdoing

Actions or behaviors that are illegal, unethical, or morally incorrect.