Junction Company had the following transactions,among others,during August.Which transaction represented an expense during August?
A) It paid $3300 in settlement of a loan obtained 3 months earlier.
B) It paid $500 for advertising performed in June.
C) It purchased $500 of repairs on account for the delivery truck,account will be paid during September.
D) It paid dividend to shareholders.

Question

Quizplus · Accepted Answer

An expense is recognized when it is incurred, regardless of when it is paid. The $500 for repairs on account represents an expense incurred in August, even though it will be paid in September.

Junction Company Had the Following Transactions,among Others,during August