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How does prepaid expense and accrued expense affect the profit of a business?
Wiki User
∙ 11y ago
it will either increase or decrease profit. Prepaid expense should increase profit as the amount has been overstated.
Wiki User
∙ 11y ago
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What is the Affect of accrued income in balance sheet?
Accrued income is an asset to the Organisation as It has earned the revenue but has not physically receive the funds for it by the end of financial year. It will be classed as a current asset.
How does business and accounting affect the society?
how does business and accounting affect in the society
How does an increased depreciation expense affect tax-related cash flows?
The depreciation deduction increases the amount of after tax cash (working capital) available to the business. The additional cash is equal to the amount of tax that would otherwise be payable on the depreciation claimed. This is because depreciation is an "unfunded" expense, but is really a tax deferral which is subject to recapture in the future.
How does the UCC affect business sales?
grfete
Can a business transaction affect at least two accounts?
yes
Is accrued expense a financial liability?
If you are doing adjusting entries, an accrued expense will affect a balance sheet account (payable) and an income statement account (expense). Such as accrued interest at the end of year would be: Interest Expense (Debit) Interest Payable (Credit)
How does loss before income tax affect accrued expenses?
loss before income tax affect accrued expenses is to avoid the billing of credit
Accrued rent expense is a liability?
Accrued rent expense is classified as an Expense. It's not classified as a liability. Expenses are paid out of "Revenue" and they affect "Retained Earnings". When you do a Trial Balance before closing out your accounts, Expenses are actually listed with Assets, because all "Expenses" contain a debit balance.There is only one reason an expense would be listed as a liability and that is if you post the transaction before paying it and then the account "Expense Payable" is used and is a liability as it is a "Payable" and actually is not listed with the term "expense" in it. For example if you have Rent Expense, then the two accounts used are Rent Expense and Rent Payable. Notice the "liability" account is actually titled "rent payable" not "rent expense".The term accrued is merely the term used in Accrual Accounting, which simply means that all transactions are recorded as they occur or "accrue" as opposed to cash basis accounting where transactions are recorded only when cash is paid out or received.In actuality if you are trying to classify your accounts, such as the question, classify the following accounts as either an Asset, Liability or Owners Equity Account, Expenses will be classified as an Owners Equity Account as they affect Retained Earnings, which in turn affects Owners Equity (stockholders equity).
What is the Affect of accrued income in balance sheet?
Accrued income is an asset to the Organisation as It has earned the revenue but has not physically receive the funds for it by the end of financial year. It will be classed as a current asset.
Are prepaid credit cards more expensive if purchased online?
No, prepaid credit cards are not more expensive if purchased online. Whether you purchase a prepaid card from a retailer in person or online does not affect the purchase price.
How does business and accounting affect the society?
how does business and accounting affect in the society
What are Environmental factors that affect a business?
how environmental factors affect in business
How does religion affect business in England?
how does religion affect business in England
How does government stability affect a business?
Yes the government can affect the stability of a business
How do consumers affect a business?
Consumers can affect a business based on consumptions of goods. The amount of goods that are bought and sold affect the profit and loss of a business.
How can spreadsheet positively affect the business of an organization?
how can spreadsheet positively affect the business of an organization
How does amortization of the principal balance affect the amount of interest expense recorded each succeeding year?
reduces the amount of interest expense each succeeding year
