In Which of the Following Situations Would the Largest Amount

question 7

Multiple Choice

In which of the following situations would the largest amount be recorded as an expense of the current year? (Assume accrual basis accounting. )

• A)$4,000 is paid in January for equipment with a useful life of four years.
• B)$1,800 is paid in January for a two-year fire insurance policy.
• C)$1,200 cash dividends are declared and paid.
• D)$900 is paid to an attorney for legal services rendered during the current year.

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Definitions:

Necessary and Proper Clause

A provision in the United States Constitution (Article I, Section 8) granting Congress the power to pass all laws considered necessary and proper for carrying out the enumerated list of powers.

U.S. Constitution

The supreme law of the United States that outlines the national frame of government and the fundamental rights of its citizens.

Necessary and Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws deemed necessary and proper for executing its enumerated powers.

Full Faith and Credit Clause

A constitutional mandate requiring states to recognize and respect the public records, judicial proceedings, and legislative acts of other states.