2. In the space below, state whether each situation is a deferral or an accrual.

Question

2. In the space below, state whether each situation is a deferral or an accrual.
_____a. Depreciation on machinery is $7,200 for the accounting period.
_____b. Interest that has been incurred on a loan but that has not yet been paid or recorded is $675.
_____c. Office supplies of $965 were on hand at the beginning of the period. Purchases of office supplies during the period totaled $640. At the end of the period, $120 in office supplies remained.
_____d. Commissions amounting to $975 were earned but not yet collected by year end.
_____e. Prepaid Rent had a $2,500 balance prior to adjustment. By year end, 50 percent had expired.
_____f. Federal income taxes for the year were estimated to be $4,680.

Explanation / Answer

a. Deferral b. Accrual c. Deferral d. Accrual e. Deferral f. Accrual

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