If an Expense Has Been Incurred but Will Be Paid

question 28

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 recorded.

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Definitions:

Fundamental Attribution Error

The tendency to overemphasize personal traits and underestimate situational factors when explaining someone else's behavior.

Dispositionally

Pertaining to or resulting from one's inherent qualities of mind and character.

Self-serving Bias

A common cognitive bias where individuals attribute positive outcomes to their own actions but blame external factors for negative outcomes.

Dispositional Explanation

An attribution that ascribes behavior to innate qualities of the individual, such as personality traits or temperaments, rather than to external circumstances.