Incurred but Unpaid Expenses That Are Recorded During the Adjusting

question 218

Multiple Choice

Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

• A) Net expenses.
• B) Accrued expenses.
• C) Prepaid expenses.
• D) Intangible expenses.
• E) Unearned expenses.

---

Definitions:

Deferral Adjusting Entry

An accounting entry made to defer the recognition of revenue or expenses to a future period.

Unearned Revenue

Money received by an entity for a service or product that has yet to be delivered or completed.

Interest Revenue

Income earned from lending money or from investments in interest-bearing accounts or securities.

Matching Revenue

The accounting principle of recognizing revenue and the related expenses in the same accounting period to accurately report profit.