Accountıng I Deneme Sınavı Sorusu #1313688
What is the entry for accrued expenses?
|
Every adjusting entry for accrued expenses debits an expense account, increasing expenses on the income statement and reducing net income, and credits a payable account, decreasing liabilities on the balance sheet. |
|
Because of adjustingentry for accrued expenses debits an expense account, decreasing expenses on the income statement. |
|
So, in adjusting entry, asset will be created as a debit and revenue as a credit. companies not increase both assets and revenues by making adjusting entries. |
|
The amount of such an accrued but unpaid item at the end of the accounting period is both an expense and a liability. |
|
The term 'accrued' means to increase or accumulate. When a company accrues expenses, this means that its portion of paid bills is increasing. |
Some types of services, such as insurance, are normally paid for before they are used. As you learned before, these prepayments are deferrals. Rent, interest, salaries, wages, utilities, etc. are the other examples of accrued expenses over time. Expenses incurred but not yet paid or recorded at the end of the accounting period are accrued expenses. Accrued expenses are the ones that are firstly incurred and not recorded as an expense until a future accounting period. Because of the unnecessity, such kinds of expenses are not required for daily recordings. For that reason, companies do not recognize them until the preparation of financial reports. The amount of such an accrued but unpaid item at the end of the accounting period is both an expense and a liability.
Yorumlar
- 0 Yorum