Deferral adjustments are needed when the business: a. Pays cash after the expense has been incurred.
b. Unanswered pays cash before the expense has been incurred.
c. Unanswered receives cash after the revenue has been generated.
d. Unanswered receives cash before the revenue has been generated.

The correct answers are the options B and D: Pays cash before the expense has been incurred. And receives cash before the revenue has been generated.

Explanation:

To begin with, in the accounting field the term of "Deferral Adjustments" refers to those that the accountant does when they postpone the report of it in the income statement until a later period, so that means that when an event happens they might decide to postpone the report of that particular transaction doing what it is called "defer". Moreover, the two most common cases when the accountants use this technique are the ones choosen from the options, the cases B and D.

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