Question

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 are expenses that have been incurred but not yet paid for at the end of a reporting period. This means that the expense has been recognized as it applies to a specific period, but payment has not been made yet. For example, if a company's rent for the month of December is due in January, the rent expense for December would be recognized in December as an accrued expense even though the payment is not made until January. Accrued expenses are typically recorded as liabilities on the balance sheet until they are paid.