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  • Exam Name: SUSE Certified Engineer in Enterprise Linux 15

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On January 2, 1991, Air, Inc. agreed to pay its former president $300,000 under a deferred compensation
arrangement. Air should have recorded this expense in 1990 but did not do so. Air's reported income tax
expense would have been $70,000 lower in 1990 had it properly accrued this deferred compensation in its
December 31,1991, financial statements, Air should adjust the beginning balance of its retained earnings
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A. $230,000 debit.
B. $300,000 credit.
C. $370,000 debit.
D. $230,000 credit.
Answer: A

Choice "b" is correct. $230,000 debit.

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Answer: B


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