If an Expense Has Been Incurred but Will Be Paid

question 54

Multiple Choice

If an expense has been incurred but will be paid later,then:

• A)nothing is recorded on the financial statements.
• B)a liability account is created or increased and an expense is recorded.
• C)an asset account is decreased or eliminated and an expense is recorded.
• D)a revenue and an expense are accrued.

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Definitions:

Natural Gas

A fossil fuel composed mainly of methane, used as an energy source for heating, electricity, and vehicle fuel.

Profit

The financial gain achieved when the revenue from selling goods or services exceeds the costs associated with production and operations.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a competitive marketplace.

Total Fertility Rate

The average number of children that would be born to a woman over her lifetime, given current age-specific fertility rates.