Which of the following would be referred to as "accruals?"

A. Cash paid prior to expenses being incurred

B. Goods and services provided, not yet collected

C. Expenses incurred, not yet paid

D. Cash collected prior to goods or services being provided

Question

Business

Elsie Mccann

16 December, 12:31

Which of the following would be referred to as "accruals?"

A. Cash paid prior to expenses being incurred

B. Goods and services provided, not yet collected

C. Expenses incurred, not yet paid

D. Cash collected prior to goods or services being provided

+4

Answers (1)

Know the Answer?

Mareli Sanchez · Answer 1

B. Goods and services provided, not yet collected

C. Expenses incurred, not yet paid

Explanation:

Accrual refers to the accounting method where transactions are recorded in the period they occur regardless of whether cash has changed hands. Accrued revenue is income earned but not yet received. Accrued expenses are costs incurred but have not been paid.

From the option provided, expenses incurred but not yet paid for is an example of accrual. The expense should be recorded even if payments are yet to be made. Goods and services provided but not yet collected should be recorded as sales revenue. A sale has occurred only that the customer has yet to collect the goods and make payments.

Which of the following would be referred to as "accruals?"A. Cash paid prior to expenses being incurredB. Goods and services provided, not yet collectedC. Expenses incurred, not yet paidD. Cash collected prior to goods or services being provided

Which of the following would be referred to as "accruals?"

A. Cash paid prior to expenses being incurred

B. Goods and services provided, not yet collected

C. Expenses incurred, not yet paid

D. Cash collected prior to goods or services being provided