The Primary Difference Between Prepaid and Accrued Expenses Is That

question 76

Multiple Choice

The primary difference between prepaid and accrued expenses is that prepaid expenses have:

• A)been incurred and accrued expenses have not.
• B)not been paid and accrued expenses have.
• C)been recorded and accrued expenses have not.
• D)not been recorded and accrued expenses have.

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Definitions:

Acceptance

In contract law, it is the act of agreeing to the terms of an offer, thus creating a binding contract.

Commercial Reasonableness

A legal standard that measures the fairness of business practices, actions, or decisions in a commercial context.

Subjective Standard

A benchmark for judgment based on personal opinions, feelings, or tastes, rather than external facts.

Good Faith

An intention to act with honesty, fairness, and integrity in dealings, without seeking to deceive or defraud.