Chapter 4, Problem 4.4E

Accruals and Deferrals

For the following situations, indicate whether each involves a deferred expense (DE), a deferred revenue (DR), an accrued liability (AL), or an accrued asset (AA).

Example: DE Office supplies purchased in advance of their use

__________ 1. Wages earned by employees but not yet paid

__________ 2. Cash collected from subscriptions in advance of publishing a magazine

__________ 3. Interest on a customer loan for which principal and interest have not yet been collected

__________ 4. One year’s premium on life insurance policy paid in advance

__________ 5. Office building purchased for cash

__________ 6. Rent collected in advance from a tenant

__________ 7. State income taxes owed at the end of the year

__________ 8. Rent owed by a tenant but not yet collected