Question

Expenses paid but not accounted as expenses means ________.

• A. contingent liability
• B. expenses paid in advance but services yet to be enjoyed
• C. outstanding expenses
• D. capitalised expenditure

Answer 1

Answer: (B)

expenses paid in advance but services yet to be enjoyed

An accrued expense is a liability that represents an expense that has been recognized but not yet paid. Not every transaction requires an immediate exchange of cash for goods and services. Sometimes, especially when there is a prolonged history of ongoing transactions between two parties, formal invoicing and payment requirements can occur after the expense associated with the transaction has been recognized.