Acompany has the following transactions: 1. pay employees' salaries for the current period. 2. pay rent in advance. 3. pay dividends to stockholders in the current period. 4. receive (but do not pay) a utility bill. 5. use supplies previously purchased. how many of these transactions result in an expense being reported in the current period using accrual-basis accounting?

Correct options are 1, 4 and 5

Explanation:

Under accrual system, expenses and income are recognized or recorded in the books when they are accrued or incurred irrespective of when the payment is made or received.

1) In this case, salaries incurred during the current period paid is an expense reported in the current period as this this expense is incurred in the current period.

4) Utility bill is incurred during the current period so its should be recorded as an expense in the current period. It does not matter if payment is made in the current period or not.

5) Supplies that were purchased earlier are utilized now so this expense will be recorded in the current period.

Rent paid in advance is a liability and not expense. Dividends are not expenses.

d. the economy will face inflation.