Which of the following is an example of an accrual?
A)Purchase of equipment.
B)Prepaid insurance.
C)Salaries earned but not yet paid.
D)All of these choices.

Question

Quizplus · Accepted Answer

Salaries earned but not yet paid is an example of an accrual because it represents an expense incurred by a company in the current period, but the payment for it will be made in the future. Accruals are recognized in the accounting records to match expenses with revenues in the same period, even if the actual payment or receipt of cash occurs in a different period. Options A and B represent cash transactions, while option D is too broad and includes all of the above options.

Which of the Following Is an Example of an Accrual