Question

Which of the following is an example of a deferral? A : recording revenues that have been earned on account B : expensing wages and salaries that will not be paid until the next period C : expensing a part of the cost of a building D : recording an expense in the same period in which it was paid

Answer 1

Answer:

C : expensing a part of the cost of a building

Explanation:

A deferral is an amount of money that was earned or paid but that would be included in the income statement in a future accounting period. According to this, the answer is expensing a part of the cost of a building because the company pays the cost of the building but includes a part of it in the current period and the remaining will be recorded in a future period.