Accrued expenses at the end of one accounting period are expected to result in cash payments...

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

true or not

Solutions

Expert Solution

The statement is TRUE as per the below explanation.

Accrued expense is expense which has been incurred but not yet paid. Expense must be recorded in the accounting period in which it is incurred. 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. An accrued expense is an accounting term that refers to an expense that is recognized on the books before it has been paid; the expense is recorded in the accounting period in which it is incurred. Because accrued expenses represent a company's obligation to make future cash payments, they are shown on a company's balance sheet as current liabilities; accrued expenses are also known as accrued liabilities. An accrued expense is only an estimate, and will likely differ from the supplier’s invoice that will arrive at a later date.

Please rate me positive i really appreciate.

Thanks

STAY HOME STAY SAFE

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Under which method are revenues and expenses recognized in the same accounting period that cash receipts...

Under which method are revenues and expenses recognized in the same accounting period that cash receipts and payments occur? Under the cash basis of accounting Under the accrual basis of accounting Under the adjusting method of accounting Under both the cash and accrual basis of accounting

Depreciation is considered as accounting policy and operational expenses for the accounting period. the value to...

Depreciation is considered as accounting policy and operational expenses for the accounting period. the value to be included in the financial statement is calculated based on the decision of the board. a) you are required to: (i) Explain the difference between capital expenditure and revenue expenditure, and how each type of expenditure will affect the financial statements of a business. ii) Explain why it is important to distinguish between capital expenditure and revenue expenditure and briefly explain the accounting treatment...

Which accounts are closed at the end of an accounting period? Select one: a. Neither Interest...

Which accounts are closed at the end of an accounting period? Select one: a. Neither Interest Expense nor Paid-in-Capital from Stock Warrants b. Both Interest Expense and Paid-in-Capital from Stock Warrants c. Interest Expense, but not Paid-in-Capital from Stock Warrants d. Paid-in-Capital from Stock Warrants, but not Interest Expense

Explain the purpose of accounting for: (i) the expense accrued at year end (ii) the income...

Explain the purpose of accounting for: (i) the expense accrued at year end (ii) the income received in advance at year end

A noncash item refers to which of the following? Select one: a. Accrued expenses b. Inventory...

A noncash item refers to which of the following? Select one: a. Accrued expenses b. Inventory items purchased using credit c. The ownership of intangible assets such as patents d. Expenses which do not directly affect cash flow e. Sales which are made using store credit Current assets include which of the following? I. Patent II. Inventory III. Accounts Payable IV. Cash Select one: a. I and III only b. II and IV only c. I, II, and IV only...

The "New Expenses" account is authorized by your manager. At the end of the period, you...

The "New Expenses" account is authorized by your manager. At the end of the period, you notice that there are several transactions under this account that you do not understand. Your manager is a no-nonsense type of person and does not like trivial and/or un-researched issues brought to her/his attention. What is your course of action?

The following statements are related to the cash flow statement: i. Cash payments for interest expenses...

The following statements are related to the cash flow statement: i. Cash payments for interest expenses can be classified into operating or investing activities ii. Cash payments for dividends can be classified into operating or financing activities. iii. Cash receipts from dividends can be classified into operating or financing activities iv. Cash receipts from interest income can be grouped into operating or investing activities The correct statement is .... A. i, ii, iii, and iv B. i, ii, and iii...

which of the following accounts is not closed at the end of the accounting period a....

which of the following accounts is not closed at the end of the accounting period a. depreciation expense b. deferred service revenue c. sales d. cost of good sold

Why are closing entries required at the end of an accounting period?

The cash payments expected for Finch Company in the month of April are

Use the information below for Finch Company to answer the question that follow.Finch Company began its operations on March 31 of the current year. Finch has the following projected costs:AprilMayJuneManufacturing costs (1)$157,800$192,400$205,800Insurance expense (2)940940940Depreciation expense2,0502,0502,050Property tax expense (3)520520520(1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred and one-fourth is paid for in the following month.(2) Insurance expense is $940 a month; however, the insurance is paid four times yearly, in the first month of...

Subjects