question archive Which of the following journal entries is used to record a deferral? A

Which of the following journal entries is used to record a deferral? A

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Which of the following journal entries is used to record a deferral?

A.

Interest expense

xxx

  

     Interest payable

  

xxx

B.

Accounts receivable

xxx

  

     Service revenue

  

xxx

C.

Wages expense

xxx

  

     Wages payable

  

xxx

D.

Cash

xxx

  

     Unearned revenue

  

xxx

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Answer:

Option D is correct,

that is Cash debited and unearned revenue credited

Since unearned revenue is the revenue which is received before it is actually earned , hence it is not recognized as a current period revenue and it is deferred for the period when it is earned or service is provided, hence it is deffered journal entry is needed, when there is receipt of cash in advance, it is credited to the liabilty account called unearned revenue and when service or sale is provided then the revenue is recognised by debiting the unearned revenue account

hence option D is correct

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