An example of an explicit transaction is
A)depreciation expense.
B)expiration of prepaid rent.
C)accrual of interest payable.
D)accrual of wages payable.
E)purchasing inventory on account.

Question

Quizplus · Accepted Answer

Purchasing inventory on account is an explicit transaction because it involves a direct exchange of goods for a promise to pay at a later date. This transaction is recorded in the accounting system as an increase in inventory and an increase in accounts payable. Depreciation expense, expiration of prepaid rent, accrual of interest payable, and accrual of wages payable are all implicit transactions that do not involve a direct exchange of goods or services.

An Example of an Explicit Transaction Is