An accrued expense is an example of a:(5 Points)Prepaid expenseUnearned revenueAccrued liabilityDeferred revenue
Question
An accrued expense is an example of a:(5 Points)Prepaid expenseUnearned revenueAccrued liabilityDeferred revenue
Solution
An accrued expense is an example of an Accrued Liability.
Here's why:
Accrued expenses are costs that a company has incurred, but has not yet paid. These expenses are usually periodic and are recorded in the period they occur to match them with the revenues generated in the same period.
In the context of accounting, a liability refers to a financial obligation, or upcoming duty to pay. An accrued liability occurs when a business has incurred an expense but hasn't yet paid it out.
So, an accrued expense is a type of accrued liability.
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