Entries That Record Cash Paid Out Before the Expense Is

question 142

Multiple Choice

Entries that record cash paid out before the expense is incurred are:

• A) accrued revenues.
• B) prepaid expenses.
• C) unearned revenues.
• D) accrued expenses.

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Definitions:

Variable Costing

A system in accounting that considers solely the changing costs associated with production (direct materials, direct labor, and variable manufacturing overhead) in the calculation of product prices.

Net Operating Income

Net Operating Income, often abbreviated as NOI, is a financial metric that calculates a company’s profit after subtracting operating expenses excluding taxes and interest.

Absorption Costing

Absorption costing is an accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Absorption Costing

An accounting method that includes all manufacturing costs (both variable and fixed) in the cost of a product.