The Operations of XY Are Seasonal; Therefore, XY Defers as Much

question 16

Multiple Choice

The operations of XY are seasonal; therefore, XY defers as much routine machinery maintenance as possible to the next slack season. Repair expense, however, is accrued monthly in an Allowance for repairs account. The balance accumulated in the Allowance account until shortly before the slack season should be reported as a:

• A) Current liability.
• B) Long-term liability.
• C) Deferred charge.
• D) Deferred credit.
• E) Valuation against machinery.

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