Which of the following adjustments is an example of an accrual?
A) The recording of wages earned by employees but not yet paid
B) The recording of periodic depreciation expense on equipment
C) The recording of service fees earned that had been received in cash at an earlier time
D) The recording of supplies expense for the period
E) None of the above

Question

Quizplus · Accepted Answer

Accruals involve recording revenues when earned or expenses when incurred regardless of when cash is received or paid. The recording of wages earned by employees but not yet paid is an example of an accrued expense, as it recognizes the expense before the cash is disbursed.

Which of the Following Adjustments Is an Example of an Accrual