Which of the Following Is an Example of an Accrued

question 148

Multiple Choice

Which of the following is an example of an accrued expense?

• A) Salary owed but not yet paid
• B) Fees received but not yet earned
• C) Supplies on hand
• D) A two-year premium paid on a fire insurance policy

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Definitions:

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced items are recorded as sold first.

Cost Flow Assumption

Accounting methods that companies use to assign costs to inventory and cost of goods sold, such as FIFO, LIFO, and weighted average cost.

Gross Profit

The financial gain obtained after subtracting the cost of goods sold from total sales revenue.

Average Cost Methods

The average cost method is an inventory costing method where all costs of inventory are averaged out and applied to the cost of goods sold and ending inventory.