Deferral Type Adjustments Occur When Cash for Expenses Is Paid

question 3

Multiple Choice

Deferral type adjustments occur when cash for expenses is paid in advance or cash from income is received in advance. Which of the following will require a deferral type adjustment?
I. Rent paid for in advance
II. Plant and Equipment to be depreciated
III. Rent collected in advance from tenants
IV. Interest is owed to the bank

• A) I and III.
• B) II and IV.
• C) I, II, and III.
• D) II, III, and IV.

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Definitions:

Relative Change

The measure of how much a variable changes in proportion to a reference amount.

Elastic

Elastic refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Price Elasticity

Price elasticity refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Demand Schedule

A chart displaying the amounts of a product or service that buyers are ready and capable of purchasing at different price levels.