Asked by Charlie Spaulding on Jun 24, 2024
Verified
The primary difference between prepaid and accrued expenses is that prepaid expenses have
A) been incurred and accrued expenses have not.
B) not been paid and accrued expenses have.
C) been paid and accrued expenses have not.
D) not been recorded and accrued expenses have.
Prepaid Expenses
Costs paid in advance for goods or services that will be used or consumed over time, recorded as assets on the balance sheet.
Accrued Expenses
Expenses that have been incurred but not yet paid or recorded at the end of a reporting period.
- Distinguish between prepaid and accrued expenses.
Verified Answer
SC
Stacy CorrietteJun 25, 2024
Final Answer :
C
Explanation :
Prepaid expenses are costs that have been paid in advance for goods or services to be received in the future, whereas accrued expenses are costs that have been incurred (i.e., the service has been received or the expense has been generated) but have not yet been paid.
Learning Objectives
- Distinguish between prepaid and accrued expenses.
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