Consider the following transactions:
(i)repayment of a loan in June 2012
(ii)depreciation of equipment in June 2012
(iii)payment of accounts payable in June 2012
(iv)payment of an insurance bill in June 2012,which covers 1 July 2012 to 30 June 2013.
Which of the above transactions increase June 2012 expenses?
A) (ii)only
B) (i)and (ii)only
C) (i),(ii)and (iii)only
D) (i),(ii)and (iv)only
E) (ii),(iii)and (iv)only.

Question

Consider the following transactions: 
(i)repayment of a loan in June 2012
(ii)depreciation of equipment in June 2012
(iii)payment of accounts payable in June 2012
(iv)payment of an insurance bill in June 2012,which covers 1 July 2012 to 30 June 2013.
Which of the above transactions increase June 2012 expenses?
A) (ii)only
B) (i)and (ii)only
C) (i),(ii)and (iii)only
D) (i),(ii)and (iv)only
E) (ii),(iii)and (iv)only.

Quizplus · Accepted Answer

Depreciation of equipment is an expense recognized in June 2012. Repayment of a loan and payment of accounts payable are not expenses, and the insurance payment is a prepaid expense for future periods.

Consider the Following Transactions