Which of the Following Transactions Results in the Recognition of an Expense

question 109

Multiple Choice

Which of the following transactions results in the recognition of an expense?

• A)Expiration of the usefulness of equipment during the accounting period.
• B)Payment on an account payable.
• C)Declaration and payment of dividends.
• D)Payment on the principal portion of a loan.

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Definitions:

Service Department Charges

Expenses allocated to a company's operational departments that provide support or services to other internal departments rather than directly to customers.

Operating Expenses

These are costs associated with the day-to-day operations of a business, excluding cost of goods sold, and may include rent, utilities, and salaries.

Departmental Expenses

Costs that are directly incurred by a specific department within an organization.

Indirect Expenses

Expenses incurred that are not directly tied to a specific product or service but are necessary for running the business, such as utilities or rent.