A hospital's accounting year ends on June 30.Which of the following events requires the hospital to record an expense accrual at June 30?
A)it hires nurses on June 28 and tells them to start working on July 5
B)it orders a new piece of equipment on June 20 for installation on July 10
C)its staff works during the week ended June 30,but is not paid until July 5
D)it receives a delivery of medicines on June 20,which are not used until July

Question

Quizplus · Accepted Answer

The hospital's staff worked during the week ended June 30, but are not paid until July 5, therefore an expense accrual is necessary to record the unpaid wages at the end of the accounting period. This is an example of an accrued expense. The other options do not require an accrual because they do not involve expenses incurred but not yet paid or recorded. Option A involves salaries to be paid in the future, option B involves a purchase order for a future purchase, and option D involves receiving goods but not using them until a later date.

A Hospital's Accounting Year Ends on June 30