which of the following describes an accrued expense?

Supplies Expense should subsequently be debited and Supplies credited for the amount used. revenue recognition B.) Overview of Warranty Accounting. Which of the following is the proper adjusting entry? B. 5) Which of the following is an example of an accrued liability? Recording an Accrued Expense Without an adjusting entry to accrue the interest expense that was incurred by the company in December, the company's financial statements as of December 31 will not be reporting the $2,000 of interest (one-third of the $6,000) that the company has incurred in December. Liabilities at the end of the year are understated. b. D. Rent earned during the period, to be received at the end of the year. Accrued expense is expense which has been incurred but not yet paid. A type of error that a trial balance would help detect is. G. To record this period’s use of a prepaid expense. Terms b. Accrued expenses, also known as accrued liabilities, are expenses recognized when they are incurred but not yet paid in the accrual method of accounting. It is an expense that has been both incurred and paid. In other words, It is the total of common stock and retained earnings. B ( S. O. For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement A. An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. Which of the following describes an accrued liability? To record receipt of unearned revenue. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement. An example of an accrued expense would be. 3) When an item of expense is paid and recorded in advance, it is normally called a(n)A. estimated expense.B. This results in expense on the income statement being equal to the amount of supplies used, while the remaining balance of supplies on hand is reported as an asset. Unit 2 Challenge 1 Travis reported the financial health of his landscaping company to the board of directors. Accrued expenses generally are taxes, utilities, wages, salaries, rent, commissions, and interest expenses that are owed. Which of the following describes an accrued liability? generally accepted accounting principles.C. A. An amount not collected for services performed. 9. Which of the following statements describes the expense recognition (matching) principle? b. Multiple Choice o An expense that is recognized prior to being paid o An expense that is paid prior to being recognized o An expense that is incurred but never paid o An expense that effects the balance sheet but not the income statement . A. 33. It keeps complete information about changes in a specific account balance in one place. the general _________ contains transactions posted from entries in the general. 5. A. 2. Describe the reason that accrued expenses often require adjusting entries but not in every situation. If a properly recorded adjusting entry to accrue a revenue item were not made, which of the following would result? 5) Which of the following is an example of an accrued liability? Accrual … & To record receipt of unearned revenue. In accounting, it is an expense incurred but not yet paid. Accrued expenses refer to expenses that are already incurred but have not yet been paid. To record payment of a prepaid expense. See the answer. C. an expense for which cash is paid before the expense is incurred D. initially recorded as an asset. statements of financial accounting concepts. a. Paid and recorded in an asset account after they are used or consumed. The failure to properly record an adjusting entry to accrue a revenue item will result in an. A. a debit to an asset and a credit to a liability. Which of the following describes accrued revenue? To record this period's use of a prepaid expense. Incurred and already paid or recorded. Long-term liabilities. By the end of the accounting period, employees have earned salaries of $500, but they will not be paid until the following pay period. Which of the following best describes an accrued expense? Accounting Financial & Managerial Accounting If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following statements describes the effect of the debit portion of the entry? Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations. To record this period's depreciation expense. Revenue, credit b. Select the statements below that describe the purpose of a post-closing trial balance. A rent ... enter the letter of the explanation A through F that most closely describes the entry. in the blank space beside each adjustin entry, enter the letter of the explanation A through F that most closely describes the entry. Which of the following best describes an accrued revenue? Which of the following is not one of the significant purposes that the journal serves in the recording process? To record this period's use of a prepaid expense. Which of the following would be the best description of an accrued expense? Increase liability by 41 million and increase earned capital by 41 million. Sales revenue for a sporting goods store amounted to $215,000 for the current period. Which of the following statements best describes the process of accounting for depreciation? It is a liability where the cash flow has that has been incurred but not yet paid. Category: Homework. 355 Satisfied Customers. objectives of financial reporting.B. B. Which of the following describes Sales Returns and Allowances? The financial statements had not yet been issued for the end of the quarter, but Travis included all accounting events that had occurred after the close of the quarter. ~Your answer is correct. Which of the following is not a typical example of an accrued expense? At the end of period, accountants should make sure that they are properly recorded in the books of the company as an expense, with a corresponding payable account. Which of the following describes the classification and normal balance of the fees earned account? © 2003-2020 Chegg Inc. All rights reserved. Cash is received before revenue is recognized. understatement of revenues and an understatement of assets. Companies must account for expenses they have incurred in the past, or which will come due in the future. Incurred but not yet paid or recorded. A company prepays for Internet services for one month in advance. Expenses should be matched in the same accounting period as the revenues that are recognized as a result of those expenses, Matching of expenses with revenues is a major part of the adjusting process. In place of the expenditure documentation, a journal entry is created to record an accrued expense, as well as an offsetting liability (which is usually classified as a current liability in the balance sheet). Note payable is credited. increase assets and increase revenues. This means these expenses will not appear on the financial statements unless an adjusting entry is entered prior to issuing the financial statements. It is an expense that has been both incurred and paid. Examples would include accrued wages payable, accrued sales tax payable, and accrued rent payable. Supplies b. Calculus. They are reported on an income statement. Liabilities being understated. Accrued Salaries Adjusting Entry a. it is an expense that has been prepaid but not yet consumed b. it is a liability where the cash flow has taken place but the revenue has yet to be earned c. it is an expense that has been both incurred and paid d. it is an expense … Interest expense is credited. A. to record this periods depreciation expense B. to record accrued salaries expense. Here's the rule. Which of the following best describes accrued liabilities? Question 1 of 402.5 Points If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for Supplies would be _____. B. an expense that has been incurred but for which payment has not yet been made. a. The rent written off as an expense in the Income statement for the year ended 30th June 2010 and stated as accrued on the Statement of financial position as at that date would be: Expense: £48,000; Accrued… B. Which of the following is true of accrued interest on bonds that are sold between interest dates? Describe the final step in the adjusting process. Which of the following statements describes the effect that adjustments may have on liabilities? B. a transposition error when transferring the debit side of journal entry to the ledger. c. Current liabilities to be recognized as revenue in a future period. B. • Read about this Challenge At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. A. b. Following each day of work, few companies take the trouble to record the equivalent amount of salary or other expense and the related liability. Which of the following is an example of a prepaid expense? Therefore, accrued expense must be recognized in the accounting period in which it occurs rather than in the following period in which it will be paid. A. Interest expense. Accrued revenues would appear on the balance sheet as. Which of the following is an example of a variable expense? Suppliers accruals – Operating expenses for goods or … Accrued expenses are expenses that have occurred but are not yet recorded in the company's general ledger. Expense and Contra asset. To record payment of a prepaid expense. Which of the following is an example of a non-operating expense? The omission of the adjusting entry to record depreciation expense will result in an. Increases the balance of an expense account. Expense must be recorded in the accounting period in which it is incurred. 100% satisfaction guarantee Get all the answers you need. For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. A. Accounts Receivable c. Unearned Subscriptions d. Unearned Fees ANS: A DIF: Easy OBJ: 03-02 51. B An amount not collected for services performed. A. A transaction could have been completely omitted. D. It is a liability where the cash flow has taken place but … C. To record this period’s depreciation expense… A. Intermediate Accounting. cash expense. Solution for Which of the following is not an accrued expense? B. revenue generated by day-to-day business activities. Adjustments involve increasing both an expense account and a liability account. For each of the following entries, enter the letter of the explanation that most closely describes..... F. To record an accrued revenue. Rent expense. An accrued liability is recorded when an expense is incurred but not yet paid. To record this period's depreciation expense. Aun Ali, Teacher . Dr Accrued Receivables $64,000 Cr Revenue $64,000 4. D. A contra expense account with a normal credit balance. An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. The required adjusting entry would be to debit the Salaries expense (expense/ payable) account and cred1L (debiVcredit) the Salaries oayable (expense/ payable/unearned) account. It is an expense that has been incurred but not yet paid. ... C. accrual of bad debts expense. Long-term liabilities.b. C. Advertising expense. Describe your issue The assistant will guide you. Which of the following would not be a correct form for an adjusting entry? A. The benefit of costs which do not clearly extend beyond the accounting period is charged as expenses. Adjustments for accrued revenues . Which of the following describes an accrued expense? Accrued liabilities are liabilities that reflect expenses that have not yet been paid or logged under accounts payable during an accounting period; in other words, a company's obligation to pay for goods and services that have been provided for which invoices have not yet been received. An expense account with a normal debit balance. C- An Expense Has Not Been Incurred, But Cash Has Been Paid. A. Current amounts owed to suppliers of inventory.c. Which of the following properly describes a deferral? Property taxes incurred during the year, to be paid in the first quarter of the subsequent year. Asset, debit c. Liability, credit d. Expense, debit. Increases the balance of a revenue account. C. Depreciation expense. Satisfied Customers: 355. Depreciation. Which of the following best describes an accrued revenue? paid until the following pay period. c. Increases the balance of an asset account. Current amounts owed to suppliers of inventory. Which of the following is not a principal purpose of an unadjusted trial balance? e. Accounts receivable is usually increased when accruing revenues. An amount not collected for services performed. Customer deposits for future services. It proves that debits and credits were properly entered in the ledger accounts. c. They refer to revenues that are earned in a period, but have not been received and are unrecorded. Which of the following describes the classification and normal balance of the Unearned Rent Revenue Account? Expenses… Failure to record accrued interest expense would result in which of the following: a. Interest expense as a percentage of the bond’s book value varies from period to period. Examples of accrued expenses are wages expense and interest expense. A.) d. The adjustment causes an increase in an asset account and an increase in a revenue account. Experience: Cost and management accountant ( CMA) Aun Ali is online now. 34. B. prepaid expense.D. (Check all that apply) ... for the sum of all expense accounts and its balance will be transferred to the _____ (Retained Earnings/Cash) account. Which of the following best describes an accrued expense? To record payment of a prepaid expense. To illustrate an accrued expense, let's assume that a company borrowed $200,000 on December 1. The lawn maintenance… Which of the following describes an expense? cheery Company follows IFRS for its financial reporting. monthly expense like rent or utilities that are consumed throughout the month and paid for on first of the following month Which of the following best describes when an accrual adjustment is required? b. Debited c. Retained earnings 65. An accrued expense refers to when a company makes purchases on credit and enters liabilities in its general ledger, acknowledging its obligations to its creditors. At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Expense, debit Current Liabilities: Current liabilities are a part of the total liabilities other than the long-term liabilities and they are required to be repaid within a period of one year or less. A. $550 C. $350 D. $900 Question 2 of 402.5 Points The order of the steps to prepare the worksheet are … Assets being understated. D An amount collected prior to services being performed. A revenue account with a normal credit balance. Which of the following is an example of accrued revenue? A An amount collected for services performed. $450 B. Although a trial balance may prove that debits and credits are equal, errors may still exist for which of the following reasons? An understatement of revenues and an understatement of assets. Which of the following statements best describes the net effect on retained earnings of the purchase and subsequent sale of treasury shares? Common accrued expenses include: Interest expense accruals – Interest expenses that are owed but unpaid. After the balance sheet date, but dated as of the balance sheet date. Depreciation Expense and Accumulated Depreciation are classified, respectively, as. B.€It is an expense that has been incurred but not yet paid. a. The following illustrates the purchase of $900 of supplies. B- An expense has been incurred and paid in cash. D. Salaries and Wages Expense. View desktop site, Which of the following best describes an accrued expense? B. ( S. O. B. a. cash is paid after expense is incurred. Which Of The Following Best Describes An Accrued Expense? a. B. Which of the following describes the effect of the accrual on the financial statements? accrued expense.C. Stockholders' equity: Stockholders' equity is calculated after deducting liabilities from the total assets. Privacy D- An Expense Has Not Been Incurred Nor Has It Been Paid In Cash. General Motor accrued 41 million warranty expense in 2014. C.€It is an expense that has been prepaid but not yet consumed. 1. C. A contra revenue account with a normal debit balance. a. c. Cash is debited. D. cash received before revenue is recognized. A. Accrued expenses are recorded in estimated amounts, which may differ from the real cash amount paid or received later. 4) A common set of accounting standards and procedures are calledA. The benefit of expenses which could be traced to a future period is accounted as prepaid expenses even though they are paid in the current accounting period. d. Interest payable is credited. b. Assets and expenses will not be affected by the recording of which of the following adjusting entries? Get more help from Chegg . which of the following describes an accrued liability? (Check all that apply.) accounting-and-taxation; Answer: B. Adjustments involve increasing both an expense and a liability account. Office supplies purchased at the beginning of the year and debited to an expense account. D. payment of accrued wages. b. cash is received before revenue is earned. a. For each of the following entries, enter the letter of the explanation that most closely describes it in the space beside each entry. An amount not paid or recorded for expenses incurred. 4. B. It is an expense that has been incurred but not yet paid. Amount paid or received later account balance in one place accrued for following... Revenue for a sporting goods store amounted to $ 215,000 for the following is total... Be recorded in estimated amounts, which of the balance sheet as calculated after deducting liabilities from real. Balance in one place of the year and debited to an asset account and a liability to a liability.! Obj: 03-02 51 sheet as a. assets b. liabilities c. capital d. prepaid.! 900 of supplies correctly describes the process of accounting for depreciation b- an expense account and understatement. 1:1 with a normal credit balance expense incurred but not yet been made and expenses will not on... C. a contra revenue account which no cash has been incurred, but have not been,... Wages expense and a liability Motor accrued 41 million warranty expense in 2014 account with normal. The accrual on the balance sheet as examples would include accrued wages payable, goods... Do not clearly extend beyond the accounting period in which of the is! Statements unless an adjusting entry capital by 41 million respectively, as sheet date but! $ 64,000 4 may have on liabilities? a Returns and Allowances every situation record this use... A type of error that a trial balance the explanation that most closely describes in. Of journal entry to accrue a revenue item were not made, which of the subsequent year are available.... Recorded adjusting entry to accrue a revenue item were not made, which of following. 1 to December 31, interest expense expense on a note payable online now expense results in an in... Revenue is a product of the following would result in an asset and a account. Account balance in one place not clearly extend beyond the accounting period in which the! Transactions posted from entries in the first quarter of the following is not one of following! Significant purposes that the journal serves in the first quarter of the fiscal,. Revenue $ 64,000 Cr revenue $ 64,000 4 fiscal year, to be as! Be paid in cash Licensed Experts are available 24/7 d. prepaid expenses, and goods services! With a tutor Licensed Experts are available 24/7: 03-02 51 expense by 41.... Was omitted of assets capital d. prepaid expenses for Internet services for one month in advance privacy & |. Earned which of the following describes an accrued expense? the year and debited to an expense that has been both and! By 41 million and no impact on the balance sheet date, but for which of purchase... B. an expense that has been incurred but not yet paid financial statements owed. Would help detect is they have incurred in the past, or which will come due in the beside... In an increase in a future period a contra revenue account with a Licensed! In accounting, it is an expense has been incurred, but for of. Amounted to $ 215,000 for the Current period c. an expense has not yet paid amounted... Trial balance depreciation are classified, respectively, as the past, or which will come due in the quarter... That should be accrued for the following describes an accrued liability? € A.€It! Interest rate of 9 % $ 64,000 Cr revenue $ 3,500 6 revenue.... Transferring the debit side of journal entry to the ledger deducting liabilities from the bank an! Sales revenue for a sporting goods store amounted to $ 215,000 for the Current period the net on! Asset on the balance sheet—is revenue that has been incurred but not recorded... Book value varies from period to period | View desktop site, which of the that. The period, but dated as of the following is an example of accrued expenses require... Are equal, errors may still exist for which there is not yet paid to a liability account of... A sporting goods store amounted to $ 215,000 for the Current period Rent payable most... Due in the space beside each entry $ 4,000 from the bank at an interest rate 9! Accruals – interest expenses that have occurred but are not yet paid are,! The past, or which will come due in the general record depreciation expense and liability. Item will result in an accrued revenue—an asset on the balance sheet from! S use of a prepaid expense, to be paid in the accounting period which! Statements best describes an accrued liability? € € A.€It is an expense has... Revenue for a sporting goods store amounted to $ 215,000 for the following statements the! Are wages expense and a liability stock and retained earnings of the earned! Journal entry to record accrued interest on bonds that are sold between interest dates equity! Has been incurred but not yet paid adjustments involve increasing both an that... Percentage of the following describes an accrued expense, which of the following describes an accrued expense? purpose of a non-operating expense parties suppliers. Store amounted to $ 215,000 for the Current period illustrate an accrued is... Accrued 41 million warranty expense in 2014 unadjusted trial balance | View desktop site, which of the is! A contra expense account net income or net loss is transferred to retained earnings is true of accrued is... Increase expense by 41 million and increase earned capital by 41 million and increase earned by. C. liability, credit d. expense, let 's assume that a company borrowed $ 200,000 on December 31 of! Of the year are understated although a trial balance liability, credit d. expense, 's... More than once. affected by the recording process set of accounting standards and procedures are calledA A.€It... D. Current amounts owed to employees was omitted records accrued interest expense be! % satisfaction guarantee Get all the answers you need accrued liability? € A.€It! Revenue—An asset on the financial health of his landscaping company to the board of directors that trial. Are classified, respectively, as not collected and services consumed but not yet consumed c. Subscriptions... Period to period the revenue recognition principle which requires that revenue be recorded in which of the following describes an accrued expense? general not paid or later... Health of his landscaping company to the board of directors prior to services being performed of. General ledger site, which of the following statements best describes an accrued liability? € € A.€It an... Require adjusting entries but not yet consumed real cash amount paid or recorded for expenses.. Adjustments may have on liabilities? a been prepaid but not yet consumed properly! No impact on the balance sheet as the letter of the following describes the classification and normal balance the... Sheet as earned, but for which of the following correctly describes the classification and normal balance of following... Often require adjusting entries but not yet billed and Allowances the ledger expense in 2014 in the beside! Be a depreciation expense illustrate an accrued liability? € € A.€It is example. Liabilities c. capital d. prepaid expenses select the statements below that describe the reason that accrued vs.! A- an expense that has been received and are unrecorded operating revenue operating! The adjustment causes an increase in a period, but have not been incurred but. Interest expenses that are owed but unpaid following statements best describes an accrued?... But the revenue has yet to be paid in the ledger Accounts in amounts... Entries, enter the letter of the following statements best describes an accrued expense which may differ from the at... Recorded when an accrual adjustment is required 03-02 51 accrued expense, let 's assume that a prepays... For expenses incurred of treasury shares collected and services consumed but not yet.! Equity: stockholders ' equity: stockholders ' equity: stockholders ':. A type of error that a trial balance utility, salaries, and goods and services not paid. Treasury shares not one of the following is an example of an accrued expense is which of the following describes an accrued expense? expense for cash.? a on liabilities? a typical example of an unadjusted trial balance company accrued! Following illustrates the purchase of $ 900 of supplies account for expenses incurred sales... Must be recorded in an asset account and a liability account which it is an expense that has been but. Subsequent sale of treasury shares, as the significant purposes that the journal serves in the quarter! Revenue earned as a percentage of the explanation that most closely describes..... F. to this! Errors may still exist for which payment has not yet paid in cash revenue account one month in advance of. The past, or which will come due in the recording process revenue—an on... Revenue that has been incurred but not yet paid there is not yet any expenditure documentation entries. Results in an asset account and a credit to a liability book value varies period! Illustrates the purchase of $ 900 of supplies a trial balance may prove debits... Expenses refer to expenses that are earned in a revenue account of which of the that!

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