When an Expense Is Incurred Prior to the Payment of Cash

question 112

True/False

When an expense is incurred prior to the payment of cash for that expense, an adjustment that increases an expense account and increases a liability is prepared.

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Definitions:

Expected Growth Rate

The annual rate at which an investment, company revenue, or economy is expected to grow over a future period.

Rate of Return

The achievement or shortfall in value of an investment during an established time, shown as a percentage of the investment’s original financial input.

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional shares.

ROE

Return on Equity (ROE) is a financial ratio that measures a company's ability to generate profits from its shareholders' equity.