Question

Under accrual accounting when does a company record expenses? If something shows up as an expense...

Under accrual accounting when does a company record expenses? If something shows up as an expense on the income statement, does that communicate to us that the expense has been paid?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Under the accrual accounting, the company will be recording the expenses when the transaction will be taking place and the company will be trying to record the expenses in the correct period, it is not about the payment of cash.it is about the incurring of the transaction rather than payment

No, when there is a recording of expense in the income statement, it will not mean that the cash has been paid but it will mean that the expense has been incurred and it will be recorded in the books of accounts according to the accrual concept.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. The financial statement that reports the revenues and expenses for a period of time such...
1. The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the Balance Sheet Income Statement Statement Of Cash Flows 2. The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the Balance Sheet Income Statement Statement Of Cash Flows 3. Under the accrual basis of accounting, revenues are reported in the accounting period when the Cash Is Received Service Or...
a) Where do expenses belong in the accounting equation? How does an increase in an expense...
a) Where do expenses belong in the accounting equation? How does an increase in an expense affect the accounting equation, assuming the expense was paid in cash. b) Does the net income amount reported on the Balance Sheet always reflect the increase in cash during the year? Explain why or why not.
As to accrual accounting, revenues (expenses) are recorded when they occur not when cash is received...
As to accrual accounting, revenues (expenses) are recorded when they occur not when cash is received (paid), that is the main reason why profit is different from net cash flow from operating activities. Then, how to reconcile a firm's net profit to its net operating cash flow, and explain why?
1. Under the cash basis of accounting, expense recognition generally does not follow revenue recognition. True...
1. Under the cash basis of accounting, expense recognition generally does not follow revenue recognition. True or False? 2. Accrued revenues are: A. earned and recorded as liabilities before they are received. B. received and recorded as liabilities before they are earned. C. revenues that have not yet been received but have been earned and have been recorded for the first time by an adjusting entry. D. earned and already received and recorded. 3. Revenue must be recognized when (or...
IN TAX AND ZAKAT ACCOUNTING Under the Accrual Method, income is reported when it satisfies some...
IN TAX AND ZAKAT ACCOUNTING Under the Accrual Method, income is reported when it satisfies some tests. What are these test? Discuss.
3. A physician’s group keeps their financial records under the cash basis of accounting. When does...
3. A physician’s group keeps their financial records under the cash basis of accounting. When does the physician group record the expense for painting their office? a. when they receive the bill b. when the painting was done c. when the bill is paid d. when management decides that the office needs to be painted
Under the accrual basis of accounting, which of the following statements is true? I. Reported net...
Under the accrual basis of accounting, which of the following statements is true? I. Reported net income provides a measure of operating performance II. Revenue is recognized when cash is received, and expenses are recognized when payment is made III. Cash inflows are recognized when they are received, and cash outflows are recognized when they are made I only III only I amd III I, II, and III
Simple Tax Accrual: Tyler Corp. reports pretax accounting income of $400,000 in 2017 when the tax...
Simple Tax Accrual: Tyler Corp. reports pretax accounting income of $400,000 in 2017 when the tax rate is 35%. Due to a single temporary difference that will reverse in 2018 when the tax rate is 21%, taxable income is $300,00. a) Prepare the compound journal entry to record Tyler Corp's 2017 income taxes. b) For each abbout included in the journal entry for part a, show its presentation within the balance sheet at the end of 2017 or the income...
Which method(s) of accounting recognize revenue when payments are received from the owner, and expenses when...
Which method(s) of accounting recognize revenue when payments are received from the owner, and expenses when bills are paid? Select one or more: a. Percentage of Completion b. Completed Contract c. Cash d. Accrual Which of the following are shown on the income statement? Select one or more: a. Liabilities b. Owner's Equity c. Equipment Costs d. Profit e. Overhead Which of the following are shown on the balance sheet? Select one or more: a. Construction costs b. Revenues c....
Which of the following is false? Group of answer choices Every adjusting entry will include one...
Which of the following is false? Group of answer choices Every adjusting entry will include one income statement account and one balance sheet account. Under accrual basis accounting, companies record revenues when they receive cash and record expenses when they pay cash. There are two types of adjusting entries: deferrals and accruals. Accrued revenue is revenue that has been earned but not yet received in cash or recorded.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT