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When an expense is incurred but has not been paid it should be credited to which account?
When an expense is incurred but not yet paid, it should be credited to an expense account and debited to a liability account, typically called "Accounts Payable" or "Accrued Expenses." This reflects that the company has incurred an obligation to pay for the expense in the future. The expense is recognized in the period it was incurred, while the liability indicates the amount owed.
An adjusting entry would adjust an expense account so the expense is reported when incurred?
True
Is fuel an expense account?
Yes, fuel is typically classified as an expense account in accounting. It represents a cost incurred by a business for operating vehicles or machinery, and is recorded as an operating expense on the income statement. This expense reduces the company's net income for the period in which it is incurred.
Are advertising expense a liability?
No, advertising expenses are not considered a liability. Instead, they are categorized as an operating expense on the income statement. Advertising expenses represent the costs incurred to promote a company’s products or services, which are recorded in the period they are incurred. While they do affect cash flow, they do not create a future obligation like liabilities do.
Which account is not classified as a selling expense Freight-Out or Sales Salaries or Advertising Expense or Sales Discounts?
Which account is not classified as a selling expense?
Would costs incurred for advertising be considered revenue or expense?
it is considered as a deferred expense.
When an expense is incurred but has not been paid it should be credited to which account?
When an expense is incurred but not yet paid, it should be credited to an expense account and debited to a liability account, typically called "Accounts Payable" or "Accrued Expenses." This reflects that the company has incurred an obligation to pay for the expense in the future. The expense is recognized in the period it was incurred, while the liability indicates the amount owed.
How does an expense increase impact the debit or credit side of the financial statement?
An increase in expenses will typically result in a debit entry on the financial statement. This means that the expense account will be debited, reflecting the increase in expenses incurred by the business.
An adjusting entry would adjust an expense account so the expense is reported when incurred?
True
Is fuel an expense account?
Yes, fuel is typically classified as an expense account in accounting. It represents a cost incurred by a business for operating vehicles or machinery, and is recorded as an operating expense on the income statement. This expense reduces the company's net income for the period in which it is incurred.
Are advertising expense a liability?
No, advertising expenses are not considered a liability. Instead, they are categorized as an operating expense on the income statement. Advertising expenses represent the costs incurred to promote a company’s products or services, which are recorded in the period they are incurred. While they do affect cash flow, they do not create a future obligation like liabilities do.
Which account is not classified as a selling expense Freight-Out or Sales Salaries or Advertising Expense or Sales Discounts?
Which account is not classified as a selling expense?
When an expense is incurred but has not been paid it should be credited where?
When an expense is incurred but not yet paid, it should be credited to an "Accounts Payable" or "Accrued Expenses" account, reflecting the obligation to pay in the future. The corresponding debit should be recorded in the relevant expense account, such as "Rent Expense" or "Utilities Expense." This ensures that the financial statements accurately represent the company's liabilities and expenses in the period they were incurred.
Is it customary for the depreciation expense account and the accumulated depreciation account to be equal?
No. Accumulated depreciation is depreciation accumulated every year and it will only increase and won't decrease. Depreciation expenses is incurred every year.
Does supplies expense have a debit or credit balance?
Supplies expense typically has a debit balance. In accounting, expenses are recorded as debits, which increase the total expenses on the income statement. When supplies are purchased, the supplies expense account is debited to reflect the cost incurred. Conversely, when supplies are used, the expense account is still debited, as it represents a cost to the business.
A sole proprietor has incurred as expense out of his personal accont - what will be the journal entry?
The expense account will be debited and capital will be credited by the same ammount
Which income statement account reports how much interest was incurred during the year?
interest expense
