Exercise 4-4 Accruals and Deferrals For the following situations, indicate wheth

Question

Exercise 4-4 Accruals and Deferrals

For the following situations, indicate whether each involves a deferred expense (DE), a deferred

revenue (DR), an accrued liability (AL), or an accrued asset (AA).

Example: DE Office supplies purchased in advance of their use

__________ 1. Wages earned by employees but not yet paid

__________ 2. Cash collected from subscriptions in advance of publishing a magazine

__________ 3. Interest earned on a customer loan for which principal and interest have not yet

been collected

__________ 4. One year

Explanation / Answer

Answer question

1. AL

2. DR

3. AA

4. DE

5. DE

6. DR

7. AL

8. AA

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