Question

In accrual accounting, to defer means to recording the other side of the cash transaction as a revenue or expense. Instead the other side of the cash entry is recorded as liability or prepaid:_____

Answer 1

Answer:

Expense

Explanation:

In accrual accounting, to defer means to recording the other side of the cash transaction for revenue as a liability usually referred to as deferred or unearned revenue.

For expense, it is recognized as prepaid expenses meaning that the expense for which cash was paid will be enjoyed in the future.

Therefore, the other side of the cash entry is recorded as liability or prepaid expense.