Which of the following transactions involves a deferral?
A) recording the prepayment of three months' rent
B) recording the interest earned (but not received)on a certificate of deposit
C) recording interest accrued on a note payable
D) recording salaries of employees earned but not yet paid

Question

Quizplus · Accepted Answer

Recording the prepayment of three months' rent involves a deferral because the payment is made in advance and the expense is not yet incurred. The rent will be expensed over the three-month period. The other options involve accruals, recording interest earned but not received, recording interest accrued on a note payable, and recording salaries earned but not yet paid.

Which of the Following Transactions Involves a Deferral