Question

GoCarts Systems pays $3,500 cash for next year's publication subscription which is known as a(n) _________. During the same week it delivers carts to a theme park and sends the customer a $15,000 invoice which is known as a(n) ___________.

Answer 1

Answer:

Deferral

Accrual

Explanation:

A deferral occurs when a company has paid out money that should be reported as an expense in a later accounting period, and/or received money that should be reported as revenue in a later accounting period while an Accrual pertains to expenses that should be reported now, but have not yet been recorded or paid, and revenues that should be reported now, but have not yet been recorded nor has the money been received.