The Recording of an Expense Could Result in a Corresponding

question 156

Multiple Choice

The recording of an expense could result in a corresponding increase in

• A)owner's equity.
• B)revenue.
• C)a liability.
• D)an asset.

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Definitions:

Externally Restricted

Pertains to funds or resources that are subject to restrictions regarding their use, imposed by external parties or agreements.

Deferral Method

An accounting method whereby revenue or expenses are postponed to future accounting periods to match revenues with expenses in the period in which they occur.

Encumbrance System

A financial accounting system that tracks commitments made against budgeted funds before actual expenditures are recorded.

Purchase Order

A formal document issued by a buyer to a seller, detailing the products or services ordered and the agreed-upon prices.