Question

	A.	Revaluation
	B.	Deferral
	C.	Accrual
	D.	Estimate An adjusting entry that is made to record a portion of expenses that are expected to occur over multiple time periods is called a(n)

Answer 1

Answer is (B.) Deferral

Deferral Expenses Adjusting entry is made in order to record the expense which is made in the current financial year but cannot be consumed within the current or next financial years. The benefit of expense can be availed for more than 1 financial year or 12 months and these expenses are expected to happen in the future for the benefit derived. Only a portion of total expense is charged every year and remaining treated as an asset.

For Example: 1) Advertisement expenses are treated as deferred expense. They are charged for more than one year as this expense made once but the benefit is availed for more than one year.

Why not other options:

-Accrued expenses are the expenses that have been availed but not paid.

- Estimated expenses are the one expected to arise in future but neither paid in the present financial year nor availed. So these transactions are made for budgeting.

- Revaluation adjusting entry record the addition or reduction in the value of asset due to differing factors.

Therefore, An adjusting entry that is made to record a portion of expenses that are expected to occur over multiple time periods is called a deferral.