Oracle
1Z0-961 · Question #63
You are using the Payable's Deferred Expense feature (also known as Multiperiod Accounting). You have entered an invoice for a three-month lease that is entered on Jan 10th. The total expense is…
The correct answer is A. On Jan 10th, Debit Prepaid Expense 12,000 and Credit Liability for 12,000and thenOn. See the full explanation below for the reasoning.
Question
You are using the Payable’s Deferred Expense feature (also known as Multiperiod Accounting). You have entered an invoice for a three-month lease that is entered on Jan 10th. The total expense is $12,000 and it covers the rental period from Jan 1st to mar 31st. Assuming that the rental expenses are split evenly per month and a monthly accounting calendar is used, what would the accounting entry be?
Options
- AOn Jan 10th, Debit Prepaid Expense 12,000 and Credit Liability for 12,000and thenOn
- BOn Jan 10th, Debit Prepaid Expense 12,000 and Credit Liability for 12,000
- COn Jan 31st, Debit Rental Expense for 4,000 and Credit Prepaid Expense for 4,000On
- DOn Mar 31st, Debit Rental Expense for 4,000 and Credit Prepaid Expense for 4,000On
How the community answered
(17 responses)- A71% (12)
- B6% (1)
- C6% (1)
- D18% (3)
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