Which of the following transactions is a claims exchange transaction?
A) Paid cash to retire notes payable.
B) Issued common stock for cash.
C) Purchased office equipment for cash.
D) Made adjusting entry to recognize the portion of unearned revenue that has been earned.

Question

Quizplus · Accepted Answer

A claims exchange transaction involves the exchange of one type of claim for another, such as recognizing revenue for a previously received payment (unearned revenue) or recognizing expenses for services already provided or goods already consumed (prepaid expenses). Option D describes an adjusting entry to recognize revenue for the portion of unearned revenue that has been earned. The other options involve either the purchase or sale of assets (office equipment), issuance of equity (common stock), or repayment of debt (notes payable), which are not claims exchange transactions.

Which of the Following Transactions Is a Claims Exchange Transaction