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(A) Current assets (B) current liabilities
An accrued expense is a liability.
Accrual basis accounting —uses the adjusting process to recognize revenue when earned and to match expenses with revenues. This means the economic effects of revenues and expenses are recorded when earned or incurred, not when cash is received or paid. Accrual basis is consistent with GAAP.
Cash basis accounting —revenues are recognized when cash is received and expenses are recognized when cash paid. Cash basis is not consistent with GAAP.
Accrual accounting also increases the comparability of financial statements from one period to another.
To accrue means to accumulate or increase something in value, whilst an expense is a clear reference to an outflow of expenditure.Therefore an accrued expense is a liability
Hi Hafiz,
Accrued expenses means expenses are already incurred but payment is not made on that period.
In order to book the expenses correctly on accrual basis & also to know the real profit or loss for the period, we are debiting the expenses and crediting the accrued expenses account as a Liability.
Accured expense is a Liability. We are making accrual due to non receipt ot the invoice from vendors for the financial year. Since we need to arrive at the correct profitablity of the company we need to meke the accurals.
it is Liability as it Accrued over a period of time .
its a liabilities of course and its means expenses are already incurred but payment is not made on that period.
It is current liabililty. Whenever we have any expense incurred but invoice not received from supplier then (to comply with matching concept) we accrue the expense and create liability in out balance sheet which will be paid once invoice is received
Liability. You are providing for an expense that has taken place but the transaction has not being processed. Also partially completed expenses taht will be processed once completed
It is a liability. This is because accruals are the expenses which ought to have been paid in the current financial period but are not yet paid at the end of the period.
