DEFERRALS  AND ACCRUALS

1.              A deferred expense occurs when you pay for an item or service before it is actually used.  List four expenses that you typically pay in advance.

 

2.              A deferred revenue occurs when you receive a payment before you have actually earned it.  List two times that you have been paid for a service or merchandise in advance.

 

3.              An accrued expense occurs when you use an item or a service after you have paid for it.  List four expenses that you typically pay “after the fact."

 

4.              An accrued revenue occurs when you have earned revenue, but you have not yet received payment.  List two examples of revenues that you earn before you receive payment.