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A company fails to recognizeAn expense incurred but not paid indicate which of the following account...

A company fails to recognizeAn expense incurred but not paid indicate which of the following account is debited and which is credited in the adjusting entry asset liability revenue or expense
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Answer #1

If a company fails to recognise an expense it will debit the expense Account and liability account will be credited. The company will pass the following adjusting entries

Expense A\c Dr

To Liability A\c Cr

This entry is based on the Golden rule of accounting

According to this rule All expenses should be debited and all revenue should be credited.

And expense are incurred but not paid will increase the liability of company so liability will be credited.

According to accounting rules all liabilities will be be credited when it increases and all asset will be debited when it increases or vice versa

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