An adjusting entry made at the end of an accounting period that reflects the exchange of cash prior to performance of a related event is classified as a(n)
A) accrual entry.
B) deferral entry.
C) revaluation entry.
D) correcting entry.

Question

Quizplus · Accepted Answer

This is a deferral entry because it reflects the payment of cash before the related event has occurred. The adjusting entry is made to defer the recognition of the expense or revenue until the related event has taken place.

An Adjusting Entry Made at the End of an Accounting