The question involves recording the expense or revenue portion of a deferral in the correct accounting period, a key aspect of accrual accounting. It includes the concepts of deferred expenses and revenues and how they impact the annual budget deficit or surplus. Recording entails adjusting entries to match income and expenditures with the period in which they are incurred or earned.
The question you've asked pertains to recording the portion of a deferral that represents the expense incurred or the revenue earned in the current accounting period. In the realm of accounting, deferrals are adjustments used to recognize revenues that have been received, but not yet earned, or expenses that have been paid, but not yet incurred. This is an important component in accrual accounting to ensure that income and expenditure are recorded in the appropriate period in adherence to the matching principle.
When it comes to the annual budget deficit or surplus, this refers to the difference in total tax revenue collected and total spending during a fiscal year. To record an expense incurred from a deferral, one would debit the expense account and credit the deferred revenue or prepaid expense account. Similarly, to record revenue earned, one would debit the deferred revenue or accrued expenses account and credit the revenue account.