Question

Which of the following is incorrect with regard to expenses?

• A. Expense is the money spent or cost incurred which is an entity's effort to generate revenue
• B. Expenses represent the cost of doing business
• C. Revenue minus expenses calculate the net profit for the business for a given period
• D. Expenses are always incurred in cash. There are no expenses which are outstanding

Answer 1

The correct option is D

Expenses are always incurred in cash. There are no expenses which are outstanding

Statement D is incorrect with regard to expenses because expenses are incurred in cash as well as there are outstanding expenses for which payment is done in the future.