Which of the following is an example of a deferral?
A)Debit Salaries Expense,credit Salaries Payable
B)Debit Accounts Receivable,credit Service Revenue
C)Debit Property Taxes Expense,credit Property Taxes Payable
D)Debit Insurance Expense,credit Prepaid Insurance

Question

Quizplus · Accepted Answer

Debiting Insurance Expense and crediting Prepaid Insurance is an example of a deferral because it represents the cost of insurance that has been paid in advance but has not yet been used or expired. As time passes, a portion of Prepaid Insurance will be recognized as an expense, and the balance will decrease until it reaches zero at the end of the insurance coverage period. The other options do not involve prepayments or deferrals.

Which of the Following Is an Example of a Deferral