Question

QUESTION 8

Explain the following:

Accrued expenses


Is an expense which was paid during a certain reporting period, but which relates to a future period.

An expense which relates to a certain reporting period but which is still unpaid at the end of that reporting period.


An income prepaid is revenue received during a ceratin reporting period but which relates to a future period.


A revenue which relates to a fixed reporting period, but is still to be received at the end of the reporting period concerned.

Answer 1

[AI-generated answer — Bot GPT 3.5]

Accrued expenses refer to expenses that have been incurred in a certain reporting period but have not yet been paid for by the end of that period. This means that the expense has been recognized in the financial statements even though the actual payment has not been made. This can happen when a company receives goods or services but has not yet received an invoice to make the payment. Accrued expenses are recorded as a liability on the balance sheet and as an expense on the income statement.